AMP considers a range of environmental and community factors as part of our everyday business.
AMP recognises climate change is a significant economic and environmental challenge impacting our society. It poses a range of risks, particularly for the investments we manage on behalf of our customers, and also the wider community.
We take measures to reduce our impact on the environment through responsible investing and carbon-reduction initiatives across the business. We have been actively pursuing these measures since 2002, when we released our first Environmental Policy and AMP Capital – AMP’s investment manager – signed up to the Carbon Disclosure Project (CDP).
AMP became carbon-neutral for our own operations in 2013 and has remained so ever since. In 2017, we continued to build on this progress, setting new operational objectives and targets. We committed to further increasing our existing analysis and assessment of climate change risks and opportunities and increased our own CDP rating to an A-minus leadership level.
Our climate change and environment initiatives include:
- Taskforce on Climate-related Financial Disclosures. In mid-2017, the final report of the G20 Financial Stability Board – Taskforce on Climate-related Financial Disclosures (TCFD) provided helpful recommendations for companies on both how they can consider climate change risks and how to disclos ethese risks within their existing financial disclosures. AMP is reviewing the TCFD recommendations within the context of our existing approach to climate risk and disclosure, with a view to aligning theseover time.
- Climate governance. Within AMP, overall responsibility for managing climate change impacts rests with the AMP Group Leadership Team (GLT) – the CEO and his direct reports. The AMP Limited Board has oversight responsibilities to manage risk and receives briefings on climate change as required via the Board Risk Committee (BRC). The GLT receives updates through the Group Risk and Compliance Committee (GRCC) and AMP’s Environment Leadership Team (ELT), which is responsible for addressing AMP’s operational environmental impacts, objectives and targets. The Environmental Legislative Compliance (ELC) Committee also monitors compliance with relevant laws including AMP’s annual reporting under the National Greenhouse and Energy Reporting (NGER) Act.
- Climate strategy and risk management. As a diversified financial services business, AMP’s focus involves understanding how the complexities of climate change impact upon our company operations, corporate reputation, the marketplace (product demand), how we respond to emerging regulatory, policy and disclosure requirements and how we manage economic transition and physical risks relating to our clients’ investments and portfolios. AMP is increasing our analysis and assessment of climate risks and opportunities across our business, including our insurance, AMP Bank, advice and superannuation divisions.
- Insights and analysis. Over the past 12 years, AMP Capital’s ESG team has published numerous investment insights covering topics such as the impact of a carbon price on Australia’s aluminium sector, regulatory design considerations for a national emissions trading scheme and how to consider climate change risk in equity portfolios.
- Renewable energy and low-carbon investments. Renewable energy is a key investment theme for AMP Capital’s infrastructure strategy and we are seeing a strong pipeline of opportunities in the US, Australia and Europe. This pipeline is matched by ever increasing interest in infrastructure equity and debt as an asset class from global investors, particularly pension plans and insurance companies.
- Metrics and targets. In March 2017, the Australian Government’s Clean Energy Finance Corporation (CEFC) committed to investing $100m in the AMP Capital Wholesale Office Fund (AWOF) – a portfolio of high-quality commercial property assets. Becoming carbon neutral by 2030 is just one of the long-term targets that made AWOF’s sustainable property strategy an attractive investment for CEFC.
- Reducing our own environmental targets. AMP is committed to reducing environmental impacts through our own business operations, engaging employees in initiatives targeting resource efficiency and reductions in our environmental footprint.
- Carbon offsets. Each year, AMP reduces emissions through energy efficiency and, to meet our targets, offsets the remaining emissions by purchasing carbon credits from verified projects. Learn more about AMP's 2017 environmental performance data.
AMP has a long history of responsible investing. Our in-house investment manager, AMP Capital, was one of Australia’s first signatories to the UN-backed Principles for Responsible Investment (PRI) in 2007.
We have since strengthened our position, understanding that it is possible to meet our fiduciary obligations to investors and our obligations to society as a good corporate citizen.
Assessing ESG risks and opportunities is an integral part of AMP Capital’s investment process. Factors such as natural resource use, environmental management, climate change, human rights, workplace health and safety, executive remuneration, board composition and diversity are among those considered when making investment decisions on behalf of our clients, including AMP Superannuation members.
AMP Capital’s ESG and Responsible Investment Philosophy outlines our approach to considering material ESG factors. Approved by AMP Capital’s Investment Committee, it links to other ESG-related policies, procedures and proprietary tools that form part of the ESG framework. These include guidelines and policies relating to corporate governance, proxy voting, engagement and active ownership.
In 2017, responsible investment initiatives included:
- Ethical investment framework. Under the new AMP Capital decision‑making framework, introduced in March 2017, companies or sectors may be excluded from our portfolio on ethical grounds. It was decided that manufacturers of tobacco, cluster munitions, landmines, biological and chemical weapons do not meet our new minimum ethical standards.
- Property and infrastructure funds. Within our real asset portfolios, AMP Capital is strengthening ESG strategies for its flagship property and infrastructure funds and their underlying assets. In 2017, three AMP Capital infrastructure equity funds ranked in the top 10 of GRESB (Global Real Estate Sustainability Benchmark) Infrastructure’s annual rankings for ESG performance.
- Community infrastructure. AMP Capital manages the AMP Capital Community Infrastructure Fund (CommIF), which invests in social infrastructure assets across healthcare, education, justice, defence, community housing, transport, water and recreational facilities.
- Continue to assess ESG risks to enhance our investment decision‑making and broaden our understanding of their impacts
- Actively monitor ESG integration across the business
AMP’s supply chains primarily consist of regulated outsourced services and relationships with other regulated financial institutions in Australia and overseas.
However, through AMP Capital’s Real Estate Asset Management activity in Australia and New Zealand, we work with a broader range of suppliers that facilitate operations in our shopping centres, office and industrial locations. We also work with a broader range of suppliers through our tenanted operations.
AMP is committed to the responsible sourcing of goods and services, creating value for our customers, employees, and the community. When engaging with our suppliers, we have robust governance structures in place that consider sustainability risks and opportunities in our supply chain. This includes committing to:
- acting ethically and with integrity in all our business relationships
- observing International Labour Organisations’ principles and committing to ensuring there is no modern slavery or human trafficking in our supply chains
- providing respectful and safe workplaces free from discrimination
- considering and monitoring the environmental impact of goods and services used by AMP
- considering supplier diversity and community engagement