AMP Capital: Is it Responsible?
Dr Robert Howell
Introduction and Summary
AMP Capital’s approach to responsible investment is described, with its ESG Approach, its exclusions based on the concepts of harm or denial of humanity, and how it engages. A brief description is given of the AMP Capital Ethical Leaders Global Shares Fund.
It was found that AMP Capital’s ESG approach is risk, not ethically focussed. There is a difference between a risk and ethical judgement. Issues such as biodiversity or worker’s rights may not seem to lead to a high risk because the companies operate in countries where the laws and ethical standards do not rate them highly.
AMP Capital’s moral principles of harm or denial of humanity are limited to the human-human domain and exclude human-Earth matters. Its few engagements are limited to Australian companies, despite banks such as JPMorgan Chase who with others have broken their public commitment not to be involved in the Project, yet have loaned US$1 billion to Adani coal miner for its Australian coal mine.
AMP Capital engaged with Rio Tinto three times in 2020. Evidence is given about the unethical character of Rio Tinto. AMP Capital should disclose the reasons why it engaged and what the outcome was, and why it still invests in Rio Tinto. AMP Capital should disclose the reasons and outcomes of all its engagements.
On the above grounds, including the lack of disclosure, AMP Capital is not a responsible investor.
In their Responsible Investment Philosophy, AMP Capital state that they use an Environmental, Social and Governance (ESG) approach to define risk.
Environmental includes natural resource use and degradation (e.g. water scarcity), waste, pollution, greenhouse gas emissions, climate change, clean technology products and services, environmental management practices. Social includes human capital, workplace health and safety, labour relations and standards, human rights, demographic changes, supply-chain and community impacts. Governance includes board composition, independence, diversity, executive remuneration and incentive plans, corporate accountability structures, compliance, negligence, bribery and corruption, conflicts of interest and related-party transactions, shareholder rights, accounting and audit quality.
Exclusions based on Harm or Denial of Humanity
In exceptional circumstances AMP Capital may exclude particular companies, asset types or industry sectors from our investable universe on moral or ethical grounds. In making such a decision, AMP Capital will take into account the extent (if any) to which a company’s activities (conduct), products or services:
Violate the principle of respect for persons which affirms the intrinsic dignity of all people irrespective of age, gender, race, religion and prohibits the treatment of any human being merely as a means to an end, and/or
Can be used without causing harm to others including those who may choose to make use of the relevant goods or services.
In undertaking its assessment AMP Capital will consider (without limitation) whether activities (conduct), products or services contravene principles accepted under international human rights laws including but not limited to UN conventions.
In their Responsible Investment Philosophy, AMP Capital recognises and applies degrees of ‘harm’ or the ‘denial of humanity’ of another person and therefore excludes manufacturers of tobacco, e-cigarettes, cluster munitions, landmines, biological and chemical weapons. There is not consistency between the Funds however: the AMP Capital Responsible Investment Leaders Balanced fund does not invest in any companies that manufacture or produce:
land mines; or
other biological or chemical weapons manufacturers.
Nor does it invest in companies that make more than 10 per cent of their sales from alcohol, gambling and/or pornography.
There is a group who are responsible for engagements, called The ESG and Investment Stewardship Team . In 2020 their activities focussed on the following five key engagement themes:
Climate change and water;
Diversity: Gender and beyond;
Human rights and supply chain;
Plastic and waste.
On 137 separate occasions in 2020, AMP Capital’s ESG and Investment Stewardship Team engaged with 92 individual Australian companies.
ANZ Banking Group
Bendigo & Adelaide Bank
Cedar Woods Property
Charter Hall Group
Charter Hall Retail REIT
Corporate Travel Mgmt
Fortescue Metals Group
Harvey Norman Holdings
Janus Henderson Group
Mount Gibson Iron
Northern Star Resources
REA Group Ltd
Sims Metal Management
Super Retail Group
Iluka Resources Limited
AMP Group Ltd
Origin Energy Ramsay Health Care
Four Engagements – Woodside
Nineteen Engagements – BHP Group
The topics of engagement were:
Covid 19 crisis 17%
Plastic and Waste 4%
Human Rights and Supply chain 12%
Climate change and water 26%
Diversity gender and beyond 7%
Renumeration and Governance 34%
They also voted about Shareholder proposals. On environmental matters they report –
Vote cast for
Santos Shareholder Proposal Regarding Alignment with The Paris Agreement;
Santos Shareholder Proposal Regarding Climate Change and Energy Advocacy;
Woodside Petroleum Shareholder Proposal Regarding Alignment with The Paris Agreement;
Woodside Petroleum Shareholder Proposal Regarding Climate Change and Energy Advocacy Report;
Vote cast against
AGL Energy Shareholder Proposal Regarding Closure of Coal-fired Power Stations;
Australia and New Zealand Banking Group Shareholder Proposal Regarding Reducing Exposure to Fossil Fuel Assets;
Beach Energy Shareholder Proposal Regarding Phase Out of Oil and Gas;
Cooper Energy Shareholder Proposal Regarding Phase Out of Oil and Gas
National Australia Bank Shareholder Proposal Regarding Reducing Exposure to Fossil Fuel Assets;
QBE Insurance Group Shareholder Proposal Regarding Reducing Investments and Underwriting Exposure to Fossil Fuel Assets;
Rio Tinto Shareholder Proposal Regarding Paris-Aligned Greenhouse Gas Emissions Reduction Targets.
On social matters they report:
Vote cast for
Origin Energy Shareholder Proposal Regarding Limiting or Ending Political Spending
Vote cast against
BHP Group Shareholder Proposal Regarding Cultural Heritage Protection
BHP Group Shareholder Proposal Regarding Industry Association COVID-19 Advocacy Activities
Insurance Australia Group Shareholder Proposal Regarding World Heritage Properties Insurance Australia Group Shareholder Proposal Regarding Industry Associations
QBE Insurance Group Shareholder Proposal Regarding World Heritage and Ramsar Properties
Woodside Petroleum Shareholder Proposal Regarding Corporate and Sector Reputation Advertising
Abstained from voting
Origin Energy Shareholder Proposal Regarding Free, Prior and Informed Consent
AMP Capital Ethical Leaders Global Shares Fund 
This Fund has around 350 investments. These are some of the bank holdings in the Ethical Leaders Global Shares Fund:
Bank Central Asia;
Bank of America;
Bank of China;
China Construction Bank
JP Morgan Chase;
Sberbank of Russia.
It also invests in Rio Tinto.
Evaluation of AMP Capital
ESG Approach to Risk
This approach is not an ethical evaluation but a risk evaluation. Issues such as biodiversity or worker’s rights may not seem to lead to a high risk because the companies operate in countries where the laws and ethical standards do not rate them highly. For ethical reasons they should be considered. There are other problems with a ESG approach which are discussed elsewhere and not repeated here .
Exclusions based on Harm or Denial of Humanity
The justification for these exclusions apply only to human-human relations and exclude human-Earth matters. This ignores the arguments of philosophers such as Singer and Shue who extend the human-human domain to include human-Earth matters.
The Australian philosopher Peter Singer is a modern Utilitarian or Consequentialist. He devotes two chapters of the third edition of Practical Ethics to climate change and the environment, respectively.  He describes an environmental ethic arguing from a human-centred ethic. He argues that we have a responsibility to avoid harming people. Individually and collectively through our emissions we are causing harm. We have an obligation to act individually and to change the policy of governments to slow climate change.
The American philosopher Henry Shue uses the social contract tradition to advocate for a rights approach based on fairness.  He states that the purpose of a right is to provide protection for human beings against a threat to which they are vulnerable and against which they may be powerless without such protective action. To be effective, such protective action must be international and intergenerational. Rapid climate change places current and future generations in the kind of circumstances that call for the construction of rights-protecting institutions. Climate change threatens the right to life, the right to health, and the right to subsistence. He argues that rights-protecting institutions are required on the principle of fairness for the right of all current and future generations to life, and for immediate action to reduce this environmental destruction.
Ethical values based on the human to Earth responsibilities should be included. The AMP Capital Group should also achieve consistency in identifying what is to be excluded.
AMP Capital Ethical Leaders Global Shares Fund
The problems with the fund’s bank investments are described elsewhere 
The engagements in 2020 were limited to 92 individual Australian companies. This is despite their funds having well over thousands of investments in companies worldwide. If AMP Capital was serious about engagement it would link with other agencies or investors who can provide a much more extensive cover. It is a major omission that AMP Capital is not engaging with banks such as JPMorgan Chase who with others have broken their public commitment not to be involved in the Project and loaned US$1 billion to Adani coal miner for its Australian coal mine.
It is not transparent or justified for AMP Capital to exclude the reasons and outcomes of engagement. For example, Rio Tinto is an unethical company. According to IndustriALL Global Union, Rio Tinto is far from ethical.  Norway’s sovereign wealth fund has ejected mining giant Rio from its pension portfolio for grossly unethical behaviour.  In Australia, Rio Tinto’s recent destruction of the culturally invaluable Juukan Gorge caused massive public protests because of its disregard of indigenous people’s rights.  A British-based performance coach who has worked with some of the world’s leading executives and sportsmen reported “serious misgivings” about alleged unethical behaviour at Rio Tinto to regulators in the UK, US and Australia. 
AMP Capital engaged with Rio Tinto three times in 2020. It should disclose the reasons why it engaged and the outcome, and why it still invests in Rio Tinto.
Is AMP Capital a responsible investor? Its ESG approach is risk, not ethically focussed. Its moral principles of harm or denial of humanity are limited to the human-human domain and exclude human-Earth matters. Its few engagements are limited to Australian companies, despite banks such as JPMorgan Chase who with others have broken their promise and loaned US$1 billion to Adani coal miner for its Australian coal mine. It is not transparent about the reasons for and outcomes of its engagements.
On these grounds, AMP Capital is not a responsible investor.
REFERENCES AMP Capital ESG and Responsible Investment Philosophy Feb 2021. Retrieved from
 Proxy Voting, ESG and Investment Stewardship 2020 Review April 2021. Retrieved from
 Retrieved from https://www.ampcapital.com/content/dam/capital/03-funds-files-only/nz-funds/holdings/ethical-leaders-global-shares-fund-holdings.pdf
 Generate and The Moral Bankruptcy of ESG. Retrieved from
 Peter Singer, Practical Ethics (Cambridge, UK: Cambridge University Press, 2011).
 Henry Shue, “Ethics, the Environment and the Changing International Order,”
International Affairs 71, no. 3 (1995): 453–461. Henry Shue, “Global Environment and International Inequity,” International Affairs 75, no. 3 (1999): 531–545. Henry Shue, “Human rights, climate change, and the trillionth ton,” in The Ethics of Climate Change, ed. Denis G. Arnold (Cambridge, UK: Cambridge University Press, 2011), 292–314.
 AMP Wealth Management New Zealand : Banks and Fossil Fuels. See Wise Response website.
 Retrieved from https://www.banktrack.org/news/deutsche_bank_jp_morgan_and_standard_chartered_break_promise_and_loan_us1_billion_to_adani_coal_miner.
 Retrieved from http://www.industriall-union.org/rio-tinto-far-from-ethical
 Retrieved from https://www.theguardian.com/business/2008/sep/09/riotinto.ethicalbusiness
 Retrieved from http://businessethicscases.blogspot.com/2020/11/rio-tinto-mining-blew-up-aboriginal.html