Alphinity Sustainable Share Fund Charter

The Alphinity Sustainable Share Fund supports Sustainable, Socially Responsible enterprises that also offer attractive prospective returns.

Society faces significant challenges to achieve sustainable development: climate change; growing disparities in income, wellbeing and living standards; ageing populations; gender inequalities; unemployment; global health threats; natural resource depletion; environment degradation and so on. Alphinity aims to play a role in helping to address these challenges through this specialised fund and, in doing so, make our earth a better place in which to live.

These challenges also bring some opportunities. We are committed to supporting those companies our research shows are doing good and avoiding those we believe aren’t.

We seek out companies that, along with offering attractive financial returns, have strong ESG practices, and have the capacity to make a positive impact on society in areas of economic, environmental and social development by contributing towards the advancement of the UN Sustainable Development Goals agenda as it evolves.

• Combating poverty through advanced food security, improved nutrition and sustainable agriculture
• Promoting healthier lives and well-being for all people of all ages
• Providing quality education which is inclusive and equitable
• Promoting gender equality and reducing inequalities
• Promoting sustainable cities and the development of sustainable human settlements
• Promoting sustained, inclusive and sustainable economic growth, full and decent employment
• Building resilient infrastructure, promoting inclusive and sustainable industrialisation
• Promoting sustainable consumption and production patterns
• Combatting climate change and its impacts
• Promoting affordable, reliable and sustainable energy production
• Conserving biodiversity, forests and the oceans in a sustainable manner
• Providing sustainable management of water and sanitation

We seek to avoid companies that are involved in activities we consider incompatible with the Fund’s charter, as they may be harmful to society and/or inconsistent with the achievement of the UN Social Development Goals. We will therefore not support companies which generate more than 10% of their
revenues from producing or operating:
• High impact fuels such as uranium, thermal coal, coal seam gas, oil sands and arctic drilling which are considered environmentally unfriendly and for which
sustainable alternatives exist. This list might increase over time as more sustainable alternatives are found that can meet current essential needs
• Gold mining, as demand for gold is primarily for speculation
• Animal mistreatment, including factory farming, animals in entertainment, live exports and animal
testing for cosmetic products
• Addictions such as tobacco, alcohol and gambling
• Armaments manufacturers
• Old growth forest logging and users of non-RSPO palm oil
• Predatory lending and hostile debt collection
• Pornography

We also avoid companies which display poor practices in their management of Environmental, Social and Governance issues.

We therefore don’t invest in companies displaying behaviours such as:
• Not managing natural resources effectively
• Unnecessarily polluting land, air or water
• Discriminating between genders and/or races
• Exploiting people through poor working conditions and/or low wages
• Breaching international human rights principles
• Displaying animal cruelty
• Trying to avoid fair tax payments

When faced with a ‘grey’ area, our Sustainable Share Fund Compliance Committee will assess the case on its merits and determine whether this is a company we can support.

Companies which meet our stringent conditions are then assessed against the Alphinity investment philosophy and process to ensure they are Sustainable, Quality, Undervalued companies entering an earnings upgrade cycle and are therefore candidates for our portfolio. We measure the portfolio’s aggregate Sustainability Rating as well as its carbon footprint vs the ASX 300 benchmark.

We seek to create a portfolio of companies which contribute towards the advancement of the UN Sustainable Development Goals agenda as it evolves, have strong ESG characteristics and display appealing investment characteristics. Our aim is to have a fund which is able to demonstrate a positive impact.