Our approach to ESG - BetaShares
Responsible investing has come of age, with more investors than ever insistent that their money is invested in a way that aligns with their values.
BetaShares is dedicated to ensuring our ethical exposures are true to label, transparent and employ some of the most stringent screening criteria in the market.
We are also committed to making a positive impact and influencing change at a corporate level by engaging with companies and proxy voting.

Investment principles

We recognise the important role that investment managers can play in promoting responsible investment practices. We are cognisant that large investors have a responsibility beyond managing the financial value of their own investment, and have an obligation to try to positively influence the way business is conducted, for the greater good.

We believe that by investing in our ethical ETFs, investors entrust us with the job of managing their capital in a way that aligns with their values. This means that our ETFs invest in companies (or exclude companies) in accordance with clear ethically focused rules and guidelines.

Where we can also make an impact is in ensuring we participate in proxy voting and engagement activities with companies.

View our Responsible investment Policy

  • 1

    Signatory to Principles for Responsible Investment (PRI)

    BetaShares is proud to be a signatory to the Principles for Responsible Investment (PRI), the world’s leading independent proponent of responsible investing. The PRI is supported by the United Nations and works to support the incorporation of ESG factors into investment decisions.

    With an international network of signatories, the PRI encourages the use of responsible investment to enhance returns and better manage risks, leading to sustainable markets that contribute to a prosperous world overall.

    BetaShares became a signatory in April 2021 and looks forward to working with PRI.

  • 2

    Member of RIAA

    BetaShares is a member of the Responsible Investment Association Australasia (RIAA).

    With over 350 members including superannuation funds, fund managers, financial advisers and individuals, the RIAA is the largest and most active network of people and organisations engaged in responsible, ethical and impact investing across Australia and New Zealand.

    BetaShares is committed to the RIAA’s goal of ensuring capital is aligned to achieving a healthy society, environment and economy

  • 3

    Trusted by Investors

    Our commitment to providing true-to-label ethical investment options has been recognised by investors, with BetaShares leading the ESG ETF industry in Australia.

    As at 31 July 2021, our eight ethical ETFs have over $3.1 billion in assets under management (AUM), representing over 64% of industry ESG AUM. In the first seven months of 2021, our ethical funds received ~$791 million in inflows, 60% of all inflows into ESG ETFs.

Funds

BetaShares’ range of ethical ETFs provides Australian investors with access to a diversified portfolio of sustainable, socially responsible companies or high-quality bonds that meet strict responsible investment standards, in a single, cost-effective ASX trade.

BetaShares Climate Change Innovation ETF (ASX: ERTH)

Access to a diversified portfolio of global companies leading the fight against climate change.
Visit ERTH fund page

BetaShares Sustainability Leaders Diversified Bond ETF – Currency Hedged (ASX: GBND)

Access to a diversified portfolio of Australian and global bonds meeting strict ethical standards.
Visit GBND fund page

BetaShares Australian Sustainability Leaders ETF (ASX: FAIR)

Access to a diversified portfolio of ethical and sustainable Australian companies.
Visit FAIR fund page

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

BetaShares Global Sustainability Leaders ETF – Currency Hedged (ASX: HETH)

Access to a diversified portfolio of large companies from around the globe that meet strict sustainability and ethical standards.

Visit ETHI fund page
Visit HETH fund page

BetaShares Ethical Diversified ETFs

The BetaShares Ethical Diversified ETFs make portfolio construction even easier for ethical investors. These ETFs are cost-effective, all-in-one portfolio solutions that offer you access to an ethically-screened portfolio diversified across asset classes in a single trade.

The BetaShares Ethical Diversified ETFs are built using ETHI, FAIR and GBND. The funds aim to passively blend the returns of the index-tracking underlying ETFs in proportion to their respective strategic asset allocations. Three BetaShares Ethical Diversified ETFs have been developed for different risk profiles – Balanced, Growth and High Growth – designed to suit various financial circumstances and investment goals.

Learn more

Proxy Voting

We use the services of a proxy adviser, Institutional Shareholder Services (ISS), that provides us with governance research and voting recommendations.

We have adopted a specific set of proxy voting guidelines, designed by ISS to have a strong focus on incorporating ESG considerations, compared to more mainstream benchmark voting policies.1

The guidelines reflect the recognition that ESG factors can present material risks to portfolio investments. Our full proxy voting record is published on an annual basis and publicly available on our website.


1Applicable from 8 March 2021 for the relevant funds that BetaShares votes on, and excludes ETHI and FAIR.

Responsible Investment Committee

BetaShares maintains a Responsible Investment Committee (RIC) for ETHI, FAIR and GBND – the only ETF provider in Australia to do so.

The purpose of the RIC is to:

  • provide BetaShares with general input and advice in relation to responsible investment policies and investments
  • provide expert assessment of whether the companies and issuers satisfy the negative and positive screens incorporated into the indices that these ETFs aim to track
  • provide voting recommendations on all ESG-related shareholder resolutions in these ethical ETFs.

The policy of each fund is to vote on ESG-related shareholder resolutions in a way that is consistent with the values embodied in the index rules for the fund.

Engagement activities

Engagement refers to how we seek information from companies about their business practices, and how we communicate our views and expectations.

If an issue arises in relation to a portfolio holding where the RIC believes there is a potential conflict with the fund’s values, or where the RIC believes a company could improve its ESG performance, delegates from the RIC will engage with the company to try to understand the situation in more detail and, if necessary, advocate for improvement.

If an investee fails to engage, or fails to commit to improvement, the RIC consider additional actions, with the final point of escalation being the removal of the holding from the relevant fund. The approach depends on factors including the company’s track record, how proactive it is in response to the issue, and how willing it is to engage with us.

Raising the bar on transparency

We understand that one of the biggest concerns for investors in ESG funds is the issue of ‘greenwashing’ – funds not delivering what they say they will. BetaShares’ focus is to ensure that our funds apply strict screening criteria, in a transparent rules-based process.

On the relevant fund page, you can find the screening process and exposure limit guidelines for our ethical ETFs.

We disclose impact metrics and alignment to the UN Sustainable Development Goals compared to the benchmark for ETHI, ERTH and FAIR.

On annual rebalance of our ethical equity funds, we publish a detailed summary of the results of the rebalance, including the reasons for exclusions and inclusions directly linked to the index screening methodologies.

ETHI FAIR ERTH

Awards and certifications

BetaShares is an award-winning ETF provider:


  • ETHI, HETH, FAIR, ERTH, GBND and the BetaShares Ethical Diversified ETFs have been certified by RIAA according to the strict operational and disclosure practices required under the Responsible Investment Certification Program.For more details*:
    www.responsibleinvestment.org

  • BetaShares ETHI ETF was awarded the Money magazine “Best International Share Exchange Traded Product” and “Best International ESG Fund Awards” for 2021.**

There are risks associated with an investment in BetaShares Ethical ETFs, including:

  • DBBF, DGGF and DZZF: asset allocation risk, market risk, currency risk, underlying ETFs risk and index tracking risk.
  • GBND: interest rate risk, credit risk, international investment risk and non-traditional index methodology risk.
  • ETHI/HETH: market risk, international investment risk, non-traditional index methodology risk and foreign exchange risk (for ETHI).
  • FAIR: market risk, non-traditional index methodology risk and sector concentration risk.
  • ERTH: market risk, international investment risk, sector risk and non-traditional index methodology risk.

For more information on risks and other features of these ETFs, please see the relevant Product Disclosure Statement.