Accident Compensation Corporation - Statement of Corporate Intent ...

Investment statement
ACC’s key investment objective is to achieve the appropriate trade-off between the competing
objectives of maximising long-term returns and minimising risk.
Key aspects of ACC’s investment policies and procedures are set out in ACC’s Investment
Statement, a document which also describes ACC’s investment benchmarks.
ACC defines investment risk in terms of how investment returns could affect ACC’s higher
level objectives of avoiding increases in levy rates and achieving full funding by the legislative
deadline. To achieve these objectives, ACC aims to:
• avoid near-term investment loss
• ensure it has investment portfolios that will tend to rise in value if the real long-term New
Zealand dollar interest rates decline (which would cause an increase in the amount of funds
required to meet ACC’s claims liability).
ACC measures the performance of its various investment activities against the relevant
benchmarks described in the Investment Statement and measures its overall investment return
against a composite benchmark. The risk-adjusted performance of each investment portfolio
is compared against these benchmarks to measure how the management of portfolios is
contributing to overall investment objectives.
ACC aims to conduct its investment activities in an ethical manner which avoids prejudice to
New Zealand’s reputation as a responsible member of the world community. In particular, ACC
will:
• not invest in activities which it believes are repugnant to the laws of New Zealand or
regarded as unethical by a vast majority of the New Zealand public
• require all internal and external fund managers to make purchases and sales of investments
in an ethical manner
• instruct internal and external fund managers to avoid investing in companies which:
– have a culture of disregard for laws, regulations, good governance procedures or
interest of shareholders, unless the manager believes that direct contacts with the
management of the company and/or proxy voting will result in improvements to this
culture
– have been identified by ACC as being contrary to its ethical policy. This includes
companies:
> whose primary business is to produce, sell or distribute tobacco products
> actually or potentially involved in the production of landmines which are not
compliant with the Ottawa Mine Ban Treaty
> involved with the design, testing, assembly and/or refurbishment of nuclear
explosive devices
• encourage internal and external managers to cast proxy votes consistent with the above.
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