Sustainable Balanced option
Want an investment option that considers select environmental and social themes, while aiming for strong, long-term returns?
We understand that many of our members want their super aligned with their values. That's why we offer the CareSuper Sustainable Balanced option (SBO) — a dedicated option that has a greater focus on environmental, social and governance (ESG) factors while delivering strong long-term returns.
Designed with socially conscious investors in mind
Expert management
Specialist managers who adopt ESG strategies to actively grow and protect your super.
Responsible growth
A diversified portfolio designed to deliver competitive long-term returns, while screening out certain listed shares.
Positive themes
Investments that aim to address select environmental and social themes.
Industry recognised
Responsible Investment Fund of the year 2025 – Sustainable Balanced option
Our Sustainable Balanced option was recognised for its consistent strong returns, investment strategy, and integration of environmental, social and governance (ESG) principles1.
Rainmaker ESG Leader Rating 2025
CareSuper has been assessed for a fifth consecutive year as a super fund that considers environmental, social and governance principles to a high level while having a track record of strong investment performance2.
How it works
You can choose to invest all or part of your super into our Sustainable Balanced option (SBO). Similar to our other Pre-mixed investment options, the SBO invests across a variety of asset classes and integrates financially material environmental, social and governance (ESG) factors into the investment decision-making process in line with our Responsible investing approach.1 Please read our Responsible Investing Policy for more information. It maintains a similar strategic asset allocation to growth and defensive assets as the Balanced option.
Listed shares negative screening criteria
Within its Australian and overseas listed shares asset classes, the SBO aims, through the application of negative screening criteria, to exclude investments in certain listed companies where their involvement in, or revenue from, certain business activities meet specific thresholds for exclusion. However, for clarity, investments are permitted in companies whose involvement in or revenue from these business activities does not meet the relevant threshold for exclusion. Additionally, CareSuper's negative screening criteria are not applied to investments in a pooled fund or to derivatives, as described below.
The SBO applies negative screening criteria only to the Australian and overseas listed shares asset classes. This means we cannot rule out any indirect exposure to restricted business activities through investments in a pooled fund or derivatives, or exposure in other asset classes, such as unlisted asset classes.
For investments in overseas and Australian listed shares (excluding pooled funds), the following negative screening criteria1,2,4 apply (effective as at 1 November 2024):
Through the application of these negative screening criteria, we aim to exclude from the SBO investments in certain listed companies, where their involvement in, or revenue from, certain business activities (called 'restricted activities' in the table below) meets the stated thresholds for exclusion. Please read the important explanatory notes below to aid your understanding of our negative screening criteria and how they are applied.
| Restricted activity | Description | Threshold for exclusions3 |
|---|---|---|
| Tobacco manufacture | Companies classified in the Global Industry Classification Standard (GICS) as belonging to the sub-industry “Tobacco”, which it defines as manufacturers of cigarettes and other tobacco products. | Companies classified in GICS as belonging to the sub-industry “Tobacco”, which it defines as manufacturers of cigarettes and other tobacco products. |
| Civillian firearms manufacture | Companies that manufacture firearms and small arms ammunition for civilian markets. | Companies involved in the stated activities, based on the most recent year of financial reporting from MSCI ESG Research. |
| Controversial weapons (sales and production) | Companies directly involved in manufacturing or selling cluster munitions, landmines, biological/chemical weapons, depleted uranium weapons, blinding laser weapons, incendiary weapons, and/or non-detectable fragments. Companies directly involved in the production of nuclear weapons or services provided for such products. | Companies involved in the stated activities, based on the most recent year of financial reporting from MSCI ESG Research. |
| Child labour | Companies MSCI flags as having been the subject of alleged child labour controversies within their direct operations or supply chains.5 Further information on MSCI’s process for identifying and scoring controversies is available in its methodology document. | Companies with a child labour controversy score of 4 or below (lower scores are more severe), as identified by MSCI ESG Research. |
| Thermal coal production | Companies generating revenue directly from thermal coal mining (including lignite, bituminous, anthracite, and steam coal) and its sale to external parties. This screen does not flag revenue from metallurgical coal; coal mined for internal power generation (e.g. in the case of vertically integrated power producers); intra-company sales of mined thermal coal; and revenue from coal trading. | Greater than 10% revenue (reported or maximum estimated)6 in the most recent year of financial reporting from MSCI ESG Research. |
| Oil and gas - extraction, production refining, distribution/retail, pipelines and transport, trading |
Companies that generate combined revenue directly from:
|
Greater than 10% revenue (reported or maximum estimated)6 in the most recent year of financial reporting from MSCI ESG Research. |
| Power production from thermal coal, oil and gas | Companies that generate revenue from thermal coal, liquid fuel, and natural gas-based power generation. | Greater than 10% revenue (reported or maximum estimated)6 in the most recent year of financial reporting from MSCI ESG Research. |
| Power production from nuclear sources | Companies that generate revenue directly from nuclear-based power generation. | Greater than 30% revenue (reported or maximum estimated)6 in the most recent year of financial reporting from MSCI ESG Research. |
| Palm oil - less than 80% RSPO certified land | Companies that produce palm oil that have less than 80% of their land certified by Roundtable on Sustainable Palm Oil (RSPO). | Companies that meet the stated description in the most recent year of financial reporting from MSCI ESG Research. |
For investments in Australian listed shares only, the following additional negative screening criteria1,2,4 apply (effective as at 1 November 2024):
| Restricted activity | Description | Threshold for exculsions3 |
|---|---|---|
| Intensive animal farming7 | Australian companies that directly produce products using methods involving intensive animal farming operations. | Greater than 10% revenue (reported or maximum estimated) in the most recent year of financial reporting as assessed by our external investment managers. |
| Animal testing (cosmetic) | Australian companies that directly produce cosmetic products that are tested on animals. | Greater than 10% revenue (reported or maximum estimated) in the most recent year of financial reporting as assessed by our external investment managers. |
| Live animal exports | Australian companies that directly engage in live animal export operations. | Greater than 10% revenue (reported or maximum estimated) in the most recent year of financial reporting as assessed by our external investment managers. |
| Gaming | Australian companies that operate gambling facilities such as casinos, racetracks, or other betting establishments. | Greater than 10% revenue (reported or maximum estimated)6 in the most recent year of financial reporting from MSCI ESG Research. |
| Pornography | Australian companies that produce adult entertainment materials. | Greater than 10% revenue (reported or maximum estimated)6 in the most recent year of financial reporting from MSCI ESG Research. |
- The list of negative screening criteria is subject to change. We will update our website to reflect any changes made. In the event of a materially adverse change, we will notify members in accordance with our disclosure obligations.
- Implementation of negative screening criteria may be impacted by data accessibility or accuracy issues or external service provider errors, potentially resulting in inadvertent holdings in excluded investments.
- We use ESG data from the MSCI Business Involvement Screening Research (“MSCI ESG Research”), using MSCI’s definitions, to identify excluded companies for all restricted activities, except for tobacco manufacture (which uses GICS' classification system to identify companies belonging to the sub-industry "Tobacco"—defined as manufacturers of cigarettes and other tobacco products), and intensive animal farming, animal testing (cosmetic) and live animal exports (where excluded companies are identified by our external investment managers). The “most recent year of financial reporting from MSCI ESG Research” refers to the most recent year of financial reporting as recorded in MSCI ESG Research. Our list of companies that meet the thresholds for exclusion under our negative screening criteria is updated by the CareSuper investment team every six months, using data sourced from MSCI ESG Research, GICS (for the tobacco manufacture restricted activity) or, in the case of the intensive animal farming, animal testing (cosmetic) and live animal exports restricted activities, using information provided by our external investment managers.
- Exclusions are implemented by our external investment managers and monitored by our custodian and the CareSuper investment team by comparing holdings against CareSuper’s current excluded companies list that is updated every six months.
- When MSCI flags a company as ‘having been the subject of alleged child labour controversies’ it then monitors the extent to which the allegation has been addressed and/or resolved. The assessment of the controversy case status is based on the remedial action taken by involved entities, as reported in public sources. Concluded cases (for example, those resolved through legal processes) are eventually assessed as ‘archived’ and removed from companies’ assessment and profiles. For further information on MSCI’s process, please see their methodology document.
- MSCI ESG Research’s revenue information is based on the most recently reported company data and is provided by MSCI for companies identified as being involved in the activities covered by the relevant business involvement screen. MSCI may use one of several approaches to determine revenue calculations, depending on the availability of information. Full details on MSCI’s approach to calculating revenue are available in MSCI’s Business Involvement Screening Research Methodology.
- CareSuper utilises research provided by the Farm Animal Investment Risk and Return (FAIRR) Initiative that states intensive animal farming involves crowding large groups of livestock into confined indoor spaces, such as stalls or cages. Our external investment managers in the Australian listed shares asset class for the SBO conduct research (either in-house or using an external ESG-focused screening tool) on each company’s activities to decide whether the company’s activities include intensive animal farming operations.
Listed shares positive environmental and social themes
Our external investment managers for the SBO’s Australian and overseas listed shares asset classes consider positive environmental and social themes when selecting certain investments.
The external investment managers use their own methods (rather than taking the same approach) to review listed companies across a range of business activities. While the external investment managers’ processes and applications differ, examples of their methods to consider positive environmental themes in the investment selection process include:
- business activities which actively address certain social and/or environmental themes, such as improvements in education, greenhouse gas emissions reduction, or healthcare.
An ‘ESG score’ is a measurement or evaluation of a company’s performance with respect to one or many ESG issues (such as energy and water efficiency, Board diversity, or employee health and safety metrics). These may be created by expert service providers or by external investment managers using an in-house framework.
If using ESG scores as a positive screening tool to consider positive environmental and social themes when selecting certain investments, our external investment managers may employ one or more of the following approaches:
- Select listed companies such that the external investment manager’s portfolio’s overall ESG score (that is, the weighted combination of ESG scores of all shares held) is higher than the ESG score of the market benchmark relevant to their investment strategy.
- Choose listed companies with an individual ESG score greater than the relevant benchmark’s average ESG score.
The United Nations Sustainable Development Goals (SDGs) is a set of 17 goals aimed at addressing global challenges across a range of ESG-related matters. For more information on the SDGs, go to the UN SDG website.
If using contribution to SDGs as a way to consider positive environmental or social themes when selecting certain investments, our external investment managers may employ one or more of the following approaches:
- Use information from a third party research provider to analyse the portfolio’s aggregate contribution to some or all of the SDGs.
- Use their own proprietary research to determine how much they consider an individual company contributes to some or all of the SDGs.
- Select companies that they assess to have a net positive alignment with one or more of the SDGs.
- Construct a portfolio that they assess to have a net positive alignment with one or more of the SDGs.
While managers may aim to identify certain investments that they consider to be aligned with or contribute to positive environmental and social themes, this does not mean that every company held, and all components of a company’s underlying business activities, will be assessed for, or contribute towards, positive environmental and social themes. For example, an individual company could be considered by the investment manager to have a combination of favourable and less-favourable ESG attributes, but be assessed overall to align with or have a positive contribution from an ESG perspective to the manager’s objectives.
In order to construct a portfolio in members’ best financial interests, some external investment managers may choose to hold companies that they consider do not contribute individually to positive environmental and social themes, but do help to create a balanced portfolio which they assess as meeting their overall ESG goals. The extent to which positive environmental and social themes are incorporated into the external investment managers’ investment decisions can vary between each external investment manager, within the context of aiming to achieve their financial performance objectives.
In helping us to monitor how our external investment managers have considered positive environmental and social themes when selecting certain investments in listed companies for their portfolios, we periodically discuss with them and review portfolio information that may include manager reporting of the overall portfolio’s ESG characteristics. For more information on how we monitor our external investment managers, please refer to our Responsible Investing page.
With the oversight of our internal ESG team, we aim to ensure that the SBO’s investment portfolio aligns with our approach to responsible investing and achieves its financial performance objectives for our members.
When the SBO invests with an external investment manager within the Australian and overseas listed shares asset classes through a separate mandate, we ensure the relevant agreement articulates the investment exclusions that the manager is required to apply, based on our negative screening criteria. Nonetheless, when the SBO invests in a pooled fund, we will still advise the external investment manager of our negative screening criteria, although they are not bound to follow it.
In the event that an external investment manager of a pooled fund invests in a listed company and that investment does not meet our negative screening criteria, we require the external investment manager to inform us of the purchase and provide an explanation for it. CareSuper will then decide whether or not to divest the holding in the pooled fund, based on what we consider to be in members’ best financial interests.
The SBO applies negative screening criteria only to the Australian and overseas listed shares asset classes. This means we cannot rule out any indirect exposure to restricted business activities through investments in a pooled fund or derivatives, or exposure in other asset classes, such as unlisted asset classes.
Choosing the right investment for you
It’s important to make sure the Sustainable Balanced option is right for you before investing in this option. Consider the following questions first.
- Do you want negative screening criteria to be applied by external investment managers for the Australian and overseas listed shares asset classes, and for the portfolio to have a more explicit focus on positive environmental and social themes compared with our other Pre-mixed options?
- The Sustainable Balanced option uses negative screening criteria to aim to exclude investments in certain listed companies from the portfolio (where their involvement in, or revenue from, certain business activities meets specific thresholds for exclusion). The negative screening criteria are not applied to investments in pooled funds or to derivatives. Are you comfortable that it may behave differently to the broader market at times?
- Have you read all the relevant information about the SBO in the relevant PDS, including the option's costs, risks and potential returns? Are you happy what you've learned suits your investing and personal goals?
- If you’re still weighing up your choice, why not ask us for help? Access to financial advice on investment choice is part of your membership.
1Awards and ratings are only one factor to consider when deciding how to invest your super. CareSuper was recognised in Money Management's 37th Annual Super Fund of the Year Awards 2025. Learn more about these awards here.
2CareSuper has an agreement with Rainmaker Information Pty Ltd (ABN 86 095 610 996) permitting it to use the Rainmaker ESG Leader logo and AAA Quality Rating logo to promote CareSuper's recognition through the Rainmaker ESG Leader rating and AAA Quality rating. Read about the award methodology at www.rainmaker.com.au.
Investment features of the Sustainable Balanced option
