Westscheme has engaged Regnan (Regnan-Governance Research and Engagement Pty Limited) to provide it with a governance advisory service for proactive, constructive engagement with listed Australian companies on environmental, social and corporate governance (ESG) issues.
Westscheme uses a style neutral enhanced index approach to managing Australian equities. ESG issues are not explicitly taken into account in this approach. In fact imposing a requirement to screen out companies purely on grounds of ESG issues has the potential to significantly limit the pool of equities to which this approach can be applied and thereby reduce the returns it can produce. However awareness of and competence in managing ESG issues are more likely to ensure that companies maintain and build their value over the long term.
The Regnan model of consultation aims to deliver ESG messages directly to those best able to influence changes in a company’s behaviour. In terms of efficiency there is more likely to be a positive impact on corporate behaviour across the board by pursuing direct engagement with companies under the Regnan model rather than by excluding particular companies from investment portfolios for ESG reasons.
Westscheme joins a number of leading superannuation funds in using Regnan’s service.
For more information about Regnan please go to www.regnan.com.
Trustee: Westscheme Pty Ltd AFSL 232709 ABN 33 009 194 218 RSE Licence No: L0000581
Westscheme ABN: 68 559 391 482 SFN: 1353/119/43 RSE Registration No: R1000825