Blossom FAQs

ESG Policy

Making money shouldn’t cost the earth.

Our core investment philosophy.

Responsible investing is at the heart of our investment management philosophy
We care about improving social and environmental change with financial returns to investors. We view this as a moral and financial imperative.

"A banking industry that plans for the risks associated with climate change and other environmental challenges can not only drive the transition to low-carbon and climate-resilient economies, it can benefit from it. When the financial system shifts its capital away from resource-hungry, brown investments to those that back nature as a solution, everybody wins in the long-term."

- Inger Andersen, Executive Director of the United Nations Environment Programme (UNEP 22/09/2019)

We must consider the broader impact on our natural environment and society by investment choices. Investment management can direct or influence capital towards sustainable investments, leveraging private capital to achieve the scale of investment required to meet the Paris Agreement goal of limiting global warming to well below 2, preferably to 1.5 degrees Celsius, compared with pre-industrial levels and help achieve the Sustainable Development Goals.

BlossomApp and ESG

ESG (Environmental, Social and Governance) was born out of Responsible Investing. It refers to factors or ratings about a company that are not part of traditional financial analysis but instead reflect material externalities which can be negative (risks) or positive (growth opportunities) for a company.
ESG considerations are becoming more critical throughout the investment chain, from the underlying companies and their supply chains right up to the businesses that deliver the investment returns to clients.
The broad components of ESG are well known, but the details, laws, policies and implementation are complex and changing. There is no single, fixed ESG template for managed funds or savings products. Divestment decisions which are solely on hard ESG criteria could harm investors or breach duties or laws. Judgements may be subjective. Circumstances will change.
BlossomApp is uniquely placed to optimise ESG considerations in the Blossom Fund and in BlossomApp’s other services within a complex matrix of competing issues, philosophies and laws.

BlossomApp in its roles applies its core investment philosophy to key decisions on product design, recommendations on investment strategies and designing key factors in investment decisions.

Application of BlossomApp’s ESG considerations.

‍BlossomApp applies its key ESG considerations to:

  • its own activities;
  • criteria for assessing investment management decisions if made directly by the Responsible Entity of the Blossom Fund; and
  • appointing, monitoring and assessing investment managers who manage investments directly or indirectly for Blossom Fund.

Other investment managers appointed for Blossom Fund from time to time are likely to have their own ESG principles or an underlying managed fund or company may have their own ESG principles. BlossomApp is committed to ensure that these principles are optimally aligned within the scope and capacity of Blossom Fund. BlossomApp acknowledges that, in some cases, there may not be full alignment between the BlossomApp ESG Policy and the investment manager’s ESG Policy.
BlossomApp commits to minimising any misalignment within the scope of Blossom Fund and legal obligations of parties involved in it. BlossomApp has a high bar for ESG outcomes so over time it aims to optimise the entire investment management chain delivering financial returns to Blossom Fund investors.

Key BlossomApp ESG considerations.

BlossomApp’s ESG considerations are implemented in two key ways:

  • exclusions; and
  • integration.

The considerations influence investment management philosophies and specific decisions on what to exclude. This is guided by the UN Global Compact in terms of inappropriate business practices. In addition, there may be exclusions that are required by law (such as trading sanctions).

Some of the common core exclusions influencing decisions at different links in the investment management chain are:

  • Thermal Coal Producers - all companies classified under GICS sub-industry code 10102030 are excluded.
  • Tobacco – those securities issued by companies that manufacture cigarettes and tobacco products classified under GICS sub-industry code 30203010 are excluded.
  • Anti-Personnel Mines - actual or potential investment in the production of landmines. This would be contrary to Anti-personnel Mines Convention Act (Commonwealth 1998), which implements the Anti-Personnel Mines Convention.
  • Controversial weapons -  investing directly or via subsidiaries in the dealing in automatic or semi-automatic     firearms.
  • Nuclear Explosive Devices - investment directly or via subsidiaries with the design, testing, assembly/refurbishment of nuclear explosive devices. This would be contrary to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and the Comprehensive Nuclear-Test-Ban Treaty (CTBT), which Australia signed in 1973 and 1998, respectively.
  • Modern Day Slavery and Human Rights – investment in companies with high-risk business models (i.e. third party labour arrangements), high-risk categories product and services, and specific high-risk geographies and high-risk geographies and without robust supplier risk management systems. This would be contrary to the Commonwealth Modern Slavery Act (Commonwealth 2018).
  • Indigenous Peoples – investments in companies that have a pattern and practice of violating the rights of Indigenous Peoples.
  • Country and/or Sovereign Debt - human rights, governance, sanctions.
  • UN Global Compact non-compliance.

Dynamic exclusions include companies that are excluded temporarily due to practices that are not aligned with ESG considerations due to, for example:

  • Environmental practices
  • Corporate governance
  • Labour practices
  • Cyber-security
  • Other controversies

Due to the nature of the exclusion considerations, the complexity of global investments and the need for integration with Blossom Fund investment processes that must take into account the duties to clients, it is not realistic to have a list of specific and absolute exclusions at any time nor is it reasonable to attempt to make any such list publicly available.  Instead, these exclusion themes are adopted and integrated as described in this policy (and should not be interpreted in any other way).

Integration of ESG considerations into investment decision making

BlossomApp’s ESG considerations are integrated into:

  • BlossomApp’s decisions on its own activities; and
  • BlossomApp’s involvement in investment decisions directly by the responsible entity of the Blossom Fund.

BlossomApp’s ESG considerations are applied when appointing, monitoring and assessing the investment management by others appointed for Blossom Fund. While BlossomApp cannot control the integration of ESG considerations by each investment manager, BlossomApp will advise Responsible Entity to terminate the appointment of the investment manager if it continues to fail to align with the ESG considerations required for the Blossom Fund. Key principles for integration of ESG considerations with investment management decisions are:

A. BlossomApp to use its influence, as a key member of the Blossom Fund’s investment committee, to implement the ESG considerations in investment decisions for the Blossom Fund.

B. Use any of these sources of ESG information:

  • Specialised external research from third party providers.
  • Controversy reports: considering recent controversies provides an additional check on management’s abilities, and potential future liabilities.
  • Sector reports: material long‐term sustainability issues and long-term industry trends in relation to regulation changes and stakeholder pressure.

C. Materiality analysis may include:

  • Assessing all material factors – traditional financial factors as well as ESG factors – to identify investment risks and opportunities that may materially impact a company, sector or country.
  • Sector or country considerations: regulatory and technological changes associated with the business activity.
  • Company considerations: material ESG issues associated with a company that are not associated with a sector.

ESG investment decision data and reporting.

This policy describes the investment philosophy and ESG considerations that are applied by BlossomApp as much as it can control its own activities and it can influence the entire investment management chain for Blossom Fund.  

BlossomApp’s responsibilities include advising Responsible Entity on external investment management selection for Blossom Fund. For advising on selection of external investment management, BlossomApp requires external investment managers to provide ESG reporting sufficient to meet BlossomApp’s policy for the Blossom Fund. BlossomApp requires a rigorous assessment of ESG policy, ongoing due diligence and reporting of investments.

It does not list specific investment decisions such as exclusions of securities or companies.  Some decisions have to be made quickly, others take a long and complex process of analysis, often of subjective investigation.  Decisions can take into account ESG and other considerations, so an investment decision could have a number of factors, weighed carefully by a number of people.  Strong application of ESG principles takes into account future possibilities and uncertainties, which are not suitable for reporting as fact.

So reportable data cannot yet be timely, or its disclosure or reporting could harm the interests of Blossom Fund investors.

BlossomApp requires reporting on ESG relevant to Blossom Fund. Universal reporting standards for ESG methodology and implementation are not yet mandatory. BlossomApp as part of its ESG investment philosophy will continue to develop towards optimising reportable ESG performance on common standards and distributing monthly ESG reporting to clients.

Industry associations and investment initiatives.

Task Force on Climate‐related Financial Disclosures (TCFD)

The Financial Stability Board created the Task Force on Climate‐related Financial Disclosures (TCFD) to improve and increase reporting of climate‐related financial information. The Blossom Fund’s management are supporters of the TCFD.

When you invest with Blossom, we give back.

We’re giving back to the forest

Blossom Fund investors have helped plant thousands of trees. BlossomApp gets trees planted in bushfire affected regions when new customers and referrals fund their accounts for the first time.

We’re giving back to cancer research

Through our referral program, BlossomApp donates funds to the Garvan Institute for their research into pancreatic cancer in memory of our founders’ late grandfather, Bertie, whose nickname was Blossom. We named our fund in honour of Blossom.

Customer feedback

We welcome feedback from Blossom customers on our ESG investment philosophy or on any of the Blossom ESG considerations. Please get in touch with the Blossom team here

Document management:

Document owner:BlossomApp Pty LtdApproved:Directors (BlossomApp)Status:Public policy.Use:GAML compliance BlossomAppDate updated:18 August 2023location:BlossomApp websiteReview:Frequently updated Scheduled annual review (next review in February 2024)Controller:Director (ESG)