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Investment restrictions

We use investment restrictions (negative screens) to limit our exposure to companies that are involved in controversial or high risk industries. Investment restrictions are monitored quarterly and reviewed on an ongoing basis.

We will not actively invest in companies that derive any revenue from:

  • Controversial weapons — including the manufacture and/or production of controversial weapons such as land mines, cluster bombs and nuclear weapons
  • Tobacco — including the manufacture and/or production of tobacco products.

We will not actively invest in companies that derive 10% or more of their revenue from:

  • Armaments — including the manufacture and/or production of armaments
  • Gambling — including the manufacture and/or production of gambling machines and services and/or ownership of outlets housing these machines
  • Old growth logging
  • Uranium mining/nuclear.

We will not actively invest in companies that derive 33.3% or more of their revenue from:

  • High carbon sensitive activities — including coal mining, oil tar sands and coal-fired electricity generation.

We will not actively invest in companies that are identified as:

  • High ESG risk — including poor governance and management of ESG risks.

When our fund managers are unable to direct funds away from controversial or high risk companies through investments in co-mingled trusts, we short sell or replace shares through our Socially Responsible Investment overlay.

For the Sustainable Australian Shares investment option, LGS will not invest in companies that derive any revenue from:

  • Controversial weapons and armaments
  • Tobacco
  • Gambling
  • Old growth logging
  • Uranium mining and nuclear energy
  • Coal mining, oil tar sands mining and coal-fired electricity generation
  • Other fossil fuels including the mining and extraction, production, supply and transportation for the coal, oil and gas industries (meaning no investments in any direct fossil fuel activities)
  • The provision of significant services to the above industries and/or companies.

The Sustainable Australian Shares option will also not invest in:

  • Financial services companies that display significant corporate conduct issues
  • Companies we identify as high ESG risk.

Using the above investment restrictions, we work with MSCI ESG Research and Hermes Investment Management to develop a list of companies that LGS will not invest in.

Read our Responsible Investment Policy.

 


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