Our Approach to Responsible Investing

Yes, our current policy is the 'Responsible Investment Policy'.

ClearBridge Investments believes that integrating sustainability into the investment process supports our responsibility to our clients in achieving their investment goals. This policy conveys our approach and methodologies in support of the commitment to responsible investment across the ClearBridge Australia business.

Yes. Our current policy can be accessed here.

In voting proxies, we are guided by general fiduciary principles. Our goal is to act prudently, solely in the best interest of the beneficial owners of the accounts we manage. We attempt to provide for the consideration of all factors that could affect the value of the investment and will vote proxies in the manner that we believe will be consistent with efforts to maximise shareholder values.

We use the opportunity to engage with the management, boards and other shareholders on sustainability issues and actively use our voting rights (where practicable) to reinforce our and our client’s views on sustainability issues. We take an active interest in casting votes at annual general meetings and extraordinary general meetings. Our investment team reviews resolutions, taking into account sustainability issues where appropriate.

Although each vote is assessed on a case-by-case basis, the portfolio managers generally support shareholder proposals that promote good governance, greater corporate transparency, accountability and ethical practices. For further information please refer to our Proxy Voting Policy which sets forth certain stated positions, including in relation to ESG proposals.

Yes, our voluntary Modern Slavery Statement is available here, and our Third-Party Supplier Code of Conduct is available here.

Yes - as a signatory, we support the following six Principles:

• Principle 1: incorporate ESG issues into investment analysis and decision-making processes.
• Principle 2: be active owners and incorporate ESG issues into our ownership policies and practices.
• Principle 3: seek appropriate disclosure on ESG issues by the entities in which we invest.
• Principle 4: promote acceptance and implementation of the Principles within the investment industry.
• Principle 5: work together to enhance our effectiveness in implementing the Principles.
• Principle 6: each report on our activities and progress towards implementing the Principles.

When we determine to invest in a company, we expect to do so for some years, and our relationship with the company’s board is an important part of our process. The investment team engages with company management on sustainability and related issues in regular meetings with key management and non-executive directors. These discussions also seek to provide feedback to companies on:

• Corporate strategy, encouraging consideration of long-term value creation and long-term risk management including sustainability issues;
• Capital management and structure; and
• Executive remuneration and incentive schemes, ensuring that executive remuneration is both appropriate for the asset and incentives are aligned with the interest of long-term shareholders.

In addition to executive management, the investment team engages with non-executive directors such as the chair, where this is separate, and the supervisory board in a two-tier structure. Discussion topics include, among other issues:

• Remuneration policy of the board, in particular decisions around incentive pay;
• Succession plans for the senior leadership team and the next level of executives;
• Governance structure; and
• Sustainability strategy.

As a signatory to the PRI since 2008, we recognise our responsibilities and accountabilities in relation to responsible investment, and as such, we regularly consult with other stakeholders, including regulators and government policymakers.

We actively participate in conferences and industry events and embrace available opportunities to discuss our approach to responsible investment in the infrastructure asset class.

ClearBridge Investments has been named a Responsible Investor by the Responsible Investment Association Australasia (RIAA) for 2023. This recognises our commitment to responsible investing and attributes as an investment manager.

Since 2013, ClearBridge has partnered with WaterAid to fund sustainable infrastructure projects that bring safe water, sanitation and hygiene education to villages in Timor-Leste (East Timor). This is a long-term partnership where the infrastructure initiatives have impacted almost every aspect of life for the people in these villages, improving health, increasing school attendance, empowering women and girls, and providing income through produce gardens. During 2019, ClearBridge Investments broadened this corporate partnership to underwrite a critical project in Colombia to bring water to the village of La Guajira.

The investment team is primarily responsible for responsible investing at the firm. For infrastructure strategies, we do not defer sustainability analysis to a dedicated ESG analyst, rather it is a responsibility of all investment team members.

Oversight of the sustainability components of the investment process is provided by the Sustainability Committee. The Committee includes the infrastructure Portfolio Managers as well as members of the global ESG strategy team.

ClearBridge has continually evolved its sustainability processes and methodologies, since initially incorporating a governance factor at inception in 2006, expanding this to ESG factors as Sustainalytics first Australian client in 2012 and continuing to evolve the process to the current ERM. We will continue to enhance the process as information, opportunities and risks associated with sustainability change.