Australian Ethical Investment Limited (AEF) Earnings Call Transcript & Summary

Good morning. I'm Steve Gibbs, Chairman of Australian Ethical Investment Limited. Firstly, I would like to acknowledge the traditional owners of the country on which we are holding this meeting this afternoon -- this morning, I mean, the Gadigal people of the Eora Nation and recognize and celebrate their continuing connection to land, waters and culture. I pay my respects to elders past and present and thank them for protecting countries since time immemorial. I welcome you to the 2022 Annual General Meeting of Australian Ethical Investment Limited. The company secretary has advised me that a quorum, which is 2 shareholders is present. I therefore declare the Annual General Meeting open. My fellow directors, Kate Greenhill, Mara Bûn, Julie Orr and Michael Monaghan and our Managing Director, John McMurdo, are present at the meeting. I would also like to introduce members of the Australian Ethical senior leadership team also present at today's meeting. Dr. Stuart Palmer, Head of Ethics Research; Mark Simons, Chief Financial Officer; Maria Loyez, Chief Customer Officer; Eveline Moos, Chief People and Culture Officer; Marion Enander, Chief Strategy and Innovation Officer; Conrad Tsang, Chief Technology Officer; and our Company Secretaries Karen Hughes and Tom May. I confirm that the company's auditor, Karen Hopkins, a partner of KPMG is present. I would like to indicate that this is Karen's last AGM as our lead partner, auditor from KPMG as she moves on by rotation in accordance with the Corporations Act. On behalf of the organization I'd like to thank Karen for the work she has done with us over the last 5 years. Thanks, Karen. We have received 370 valid proxy forms and this represents approximately 35% of the ordinary voting shares on issue. The proxy votes will be released to the ASX with the results of this AGM. The notice of meeting was dispatched to all shareholders. I will take the notice of meeting as read. Briefly, the procedure for the meeting will be as follows. Firstly, please note that we are recording today's proceedings and the recording may be available on our website in due course. The order of business will be as follows: I will deliver a short address, our Managing Director and CEO, John McMurdo, will then address the meeting. After those 2 prerecorded addresses are shown, I will ask if anybody has any questions of me or John. If you do want to ask a question, you should click on the Ask a Question button, type your question and then press to submit. After that, we will then proceed with the formal agenda. I note that in accordance with the company's constitution, the status of employees has been reported on -- in the sustainability report. Financial statements will be tabled and I will provide an opportunity for shareholders to ask questions of directors, the auditor on management in relation to the financial statements for the year ended 30th of June '22. Polls will then be conducted for all resolutions. You can vote at any time, provided, of course, you've not already done so. And I urge you to vote as soon as you can. I will leave a short period of time at the end of the meeting to allow people to finalize the vote -- their vote before I close the meeting. The results of the polls will be published on the ASX and on the company's website as soon as the information is available, which we expect will be this afternoon. We have prerecorded addresses, as I've mentioned this year, and my address to you will now be played. Financial year '22 was a challenging year for Australian Ethical as it was for almost all investment managers and superannuation funds. We saw the breakout of the Ukraine war with the resulting energy crisis, and knock-on impacts to the financial markets in terms of market volatility, increasing inflation and rising interest rates. These challenges have continued into the first part of financial year 2023. Australian Ethical's managed investment schemes and Super Fund options have underperformed in many cases, mainly because industry sectors and individual companies that we do not invest in because of the Ethical Charter have done comparatively better. This will happen from time to time, particularly if 1 looks at short-term time periods. Our medium- to long-term investment performance for most schemes and super options remains good, both in absolute terms and compared with benchmarks and competitors. And we believe the outlook for the long-term performance of our funds remain strong. Current geopolitical events and natural disasters only serve to underscore the importance of energy security and tackling climate change. Our ethical investment philosophy has a long-term strategic focus on future building companies that will thrive in a low-carbon economy. We also take comfort in our years of experience. And as I say, strong long-term investment track record. Times like these are difficult but we expect the heightened volatility of the markets to lead to a renewed focus on solving urgent global problems together with opportunities to invest wisely for the long term. We are already well ahead of this curve, and we will continue to be very true to label to invest in a way that protects people, the planet and animals. Despite these challenging conditions, Australian Ethical has made significant progress on our high-growth strategy. This includes strengthening our already strong investment team and by adding 3 new investment committee members who bring with them a diverse range of experience and knowledge. By Friday, we will have also finalized our Successor Fund Transfer deed with Christian Super, which our Managing Director and CEO, will have more to say about in his address. But I do want to congratulate and thank everybody who has worked on bringing this to a successful conclusion. It has been an enormous task completed in what I think will be recognized as record time. In 2021, we shared with you our shareholders, our 3-year investment strategy for the business that is building agility and scalability, so we are in the best possible position to capitalize on the growing cohort of Australian investors and super fund members that want to invest ethically in line with their values. The money we are investing back into AEI is already leading to considerable benefits of scale and improved customer service. It's no great secret that lots of investment companies and Super Funds are increasingly creating sustainable or ESG funds to try and capture the growing trend among Australians to invest responsibly. I may mention of this in my address to last year's AGM. Unfortunately, many fund managers are screening investments through an ESG integration model, which is today the fastest-growing responsible investment category. ESG integration does not of itself mean that companies are doing harm to people, the planet and animals are avoided. So while many investors may believe quite understandably, that their money is going toward improving environmental and social solutions as well earning returns. Our fund using ESG integration may include harmful stocks in its portfolio, including fossil fuel investments, gambling, tobacco, deforestation, et cetera. Australian Ethical continues to call for comprehensive Commonwealth climate legislation to bring about a fair and efficient economic transition to reduce climate risk and unlock climate opportunity. We are already voluntarily reporting using a best practice standard produced by the international task force on climate-related financial disclosures, known as TCFD, like we did on modern slavery before the government introduced legislation making it mandatory in 2020. We're hoping standardized sustainability reporting will be the next step the federal government takes to bring about greater transparency and minimizing greenwashing. And as I did say last year, we will not hesitate to call out greenwashing and we welcome the increased focus of ASIC in this regard. Better sustainability reporting will provide investors with confidence in and insurance of sustainability claims, enabling comparability between investment products and portfolios. Our goal is for systemic change in the financial markets, along with much broader changes we want to see in the world. I would like to thank you, our shareholders, for your support in a turbulent year for markets. We are the leaders in ethical investing in Australia, and we will continue to do what is right and advocate on behalf of our customers, people, animals and the planet towards a better future. I take this opportunity to thank my fellow Non-Executive Directors, Kate Greenhill, Mara Bûn, Michael Monaghan and Julie Orr, all of whom make extremely valuable contributions to the company and who exercise their responsibilities with care and commitment. I want to acknowledge the contribution of all Australian Ethical staff, and to thank them on your behalf for the brilliant job that they do collectively. Our senior leadership team have again, both on an individual basis and as a team, performed extremely well. And our Managing Director, CEO, John McMurdo, has provided the leadership and strategic thinking that notwithstanding the difficult times, has seen the company grow not just in size, but in influence as well. John McMurdo, our Managing Director, will now speak about the company and the opportunities it faces also an approved recorded address. Many of the company's highlights from the past financial year are shown in slides on the bottom of your screen.

Thanks, Steve. I'd also like to acknowledge the traditional owners of the country on where we meet today. For me, the Gadigal people of the Eora Nation and pay my respects to their leaders, past and present, and thank them for protecting country since time immemorial. Good morning to our shareholders who joined us for our 2022 AGM today. I look forward to sharing with you my perspectives on the business and to answering your questions later in the proceedings. I want to acknowledge and thank the entire Australian Ethical team, including our leadership group who are present this morning for their tireless efforts over the past 12 months as we have undergone a period of significant change and growth as we grow our business into 1 that is considerably larger, more capable and more resilient than we were even 2 or 3 years ago. The customer perspective is always where I choose to begin. Just last week, I was speaking with 1 of our superannuation customers, a 58-year-old transport consultant. I was speaking about the impact that higher energy and mining stocks have had on the broader market, and the fact our returns have not been as great as in previous years and asked him how we thought about it. He paused and he said, "You know what, John, I recon like me, your other super members and investors wouldn't want to profit or fossil fuel companies either." It was an encouraging reminder that our customers are invested because they have a genuine desire not only to grow their retirement savings and wealth, but to do so in a way that is ethical and aligns with their personal values. There's no doubt, though, that 2022 has been a time of reckoning for all investment managers. In addition, to the loss of thousands of lives and the displacement of millions more, the war in Ukraine and the flow-on effects have been a test for responsible investors on at least 2 fronts. First, would you believe that on the eve of Russia's invasion of Ukraine, so-called ESG funds collectively held a staggering USD 8.3 billion in Russian assets. Meaning many funds have been making substantial investments in Russia despite the human rights and other challenges in that market. Of course, most were forced to hardily divest. ESG benchmarks and measuring tools didn't necessarily pick up even the financial risks of having exposure to Russia within those portfolios, let alone the clear ethical challenges. It reveals that the ESG considerations of many investors and fund managers have nothing to do with Ethics at all. Second, and since then, Russia's invasion has been delivering short-term windfall profits for fossil fuel companies. The subsequent outperformance of energy sector shares has become a challenge for responsible investors that are typically underweight on oil and gas companies and many, including Australian Ethical saw performance weighing when compared with conventional funds. While the invasion underlines the urgency of removing dependency on fossil fuels, it has also revealed the true colors of many so-called ESG funds who are reinvesting in fossil fuel companies and aging demands on them. Humans and organizations show their true colors when pressure amounts. And it's my clear conclusion that many of the new ESG managers have been proven to be at best ethically passive and often outright ethically blind, because this is an incredibly high stakes game. Every investment in energy is either backing a successful transition that would make investing in fossil fuel producers, a very poor longer-term investments or it's betting on a failed transition with the long-term devastation of the planet, and then the financial devastation that would inevitably come with that outcome. And while it's true that investing responsibly in the energy transition has become more complicated since Russia invaded Ukraine, it's time for long-term investors to shun fossil fuels. Even before the Russian invasion, the world was not on track to achieve most of the United Nations sustainable development goals. And with many targets set back by the new geopolitical situation, even more capital will now be required to reach a low carbon future. The good news is that Australian Ethical is facing into these headwinds by continuing to invest with heart in a virtuous cycle where profit and purpose combined to deliver financial returns while changing the world for the better, in line with our ethical charter that has remained unchanged for more than 36 years. The financial system has to take a leading role in a sustainable future, and has again been a dominant topic at COP 27 in Egypt over the last 2 weeks. The accountability of finance and markets and underlying drivers of climate investment continue to receive attention. The global investor statement was touted as a key guide in a way to communicate support for better policy on the financial disclosure of risks. Speakers pointed to the U.S. SEC's proposal for climate-related financial disclosure and the importance of the task force on climate-related financial disclosures, the TCFD and the International Sustainability Standards Board as key drivers to help investors define opportunities and track progress. As Steve has mentioned, it's no surprise that Australian Ethical is ahead of the curve and already reporting to TCFD standards. Experts agree [ metdata ] is the biggest tool investors have. We believe all investors deserve to see a lifting of the standards here to see more Australian companies reporting more consistently and transparently with their stakeholders, shareholders and customers alike. Having spoken about the opportunity and the risk to the world, let me share how we see the opportunity for Australian Ethical. The demand for responsible investing in Australia continues to grow substantially with research from the Responsible Investment Association showing that more than 5 out of 6 Australians believe it is important that their super fund or bank commits to reducing greenhouse gas emissions. 81% of Australians want to see them pledged to achieve net zero by 2050. The proportion of Australians with responsible investments is changing materially since 2020, now up to 17% as of 2021, mostly GenXs and millennials. But here's the exciting news. A further 46% are considering investing in responsible investment products within the next 5 years, with 26% aiming to do so within the next year. And so with 36 years' experience in responsible investing, we think that this growth in demand remains a massive opportunity for Australian Ethical. We have shared our strategy to continue to invest in the size and scalability of our business, balanced, of course, with careful cost management, but to build a robust business capable of capturing new opportunities, accelerating existing growth opportunities and effectively managing a business substantially larger than we are today. In terms of highlights of last year and there are many, we made targeted strategic hires to bolster our capability to support future growth, including the appointment for the first time of a Chief Technology Officer as well as expanding our business intelligence and technology team to increase data analytics and further enhance our data-led decision making. We had 3 new hires join our investment team to strengthen our investment leadership and to grow and diversify our institutional channel. We have also grown our sales and customer services teams to support the increase in customer and adviser volumes and expanded our back office infrastructure, including implementation of a new telephony system, which along with team expansion and other process improvements has lifted the contact center's customer services metrics to better than the industry standard. And in addition to the enhanced contact center capability, we have continued to build out our purpose-led customer experience. Central to our efforts has been understanding the customer journeys for different customers and segments and mapping the different touch points and interactions through which customers engage with us. Using this research to inform us, we have launched new digital interfaces for customers, introduced an app to make it easier for customers to connect with us and have entered the listed channel through the launch of our High Conviction Fund as an exchange traded fund with the ticker AEAE. I love that ticket. AE-AE. This focus on customer experience has seen us lead market net promoter scores for both Super and Managed Funds for the first time. Our annual engagement survey continues to reflect the strength of our culture. In a year where the impacts of COVID-19 continued to disrupt us, we were particularly pleased by our continuing top quartile engagement score of 79% and the quality of the talent we are attracting to our business, despite the competitive recruitment landscape. We have added new acquisition channels through our recent partnerships with employer platforms and remain the fastest-growing super fund over 5 years. We have also significantly scaled our adviser channel, which resulted in net flows growing by 46% to $0.3 billion last year, and we now manage more than $1.3 billion through this relatively new channel. Australian Ethical had $940 million of positive net flows last financial year. In terms of flows from our core retail customers, they were up 20% on the previous year's then record flows to a new record of $1.14 billion. And within that number, we saw superannuation flows increase by 22%. And despite the challenging market conditions, unlike many of our competitors, we still recorded funds under management and revenue growth for the year. FUM was up 2%, and operating revenue increased a full 21%. We received many awards and accolades for our efforts. Notably, we continue to be recognized as a responsible investment leader by Rio. But we were also recognized as an ESG leader by Rainmaker and a sustainability leader by the AFR. But we want to have impact on markets far beyond our funds under management. Markets need systemic change, and we want to lead that change because it needs to happen now. In addition to our investments, we also pursue systemic change through our ethical stewardship and advocacy to improve the behavior of companies, of governments, of consumers, and of citizens. Last year, our ethics research team engaged with over 450 companies with the investment community and government directly on their own or with others, for the good of the planet, people and animals. As a result of our advocacy, more than 25% of the companies we proactively engaged with committed to making positive changes to their ambition and practices. The foundation is another way that we create impact. Every year, Australian Ethical donates 10% of profits to the Australian Ethical Foundation with a vision that includes directing as much philanthropy as possible to effective solutions addressing the climate emergency by funding leading research and analysis to unearth and support highly effective charities addressing climate change and other important causes. 2022 was another high impact year with $1.6 million allocated in funding support to over 25 charities fighting climate change. As you've heard, we have a highly capable business, now able to grow organically in a number of channel and product demands and with the additional and newly added capability to grow inorganically also. A highlight of the year, of course, was securing the opportunity to transfer Christian Super members to Australian Ethical. By close of business this Friday, our customer numbers are expected to have grown by up to another 30,000 on account of this initiative. This growth increases our impact and delivers on our purpose. It enables us to grow our portfolio of good money to further raise our voice as an active shareholder and accelerate our contributions to the Australian Ethical Foundation. We'll be passing on benefits of scale to all Super Fund members through continued fee reductions and improvements to our member experience, and we look forward to welcoming these new members to Australian Ethical. I'm extremely proud of what our team has achieved this year and look forward to seeing the results of the next stage of the growth strategy that we are implementing in 2023. In concluding, we haven't been immune to the volatility in financial markets this year, and our lack of exposure to the energy sector has caused short-term challenges to investment performance. But I want to be clear on 1 thing. As we have demonstrated for 36 years now, ethical investing is not philanthropy. You do not have to sacrifice long-term returns to invest in line with your values, whether you're an ethical investor or not, the smart money is on investing in companies that are trying to solve the world's problems in industries that are sustainable. And I'm confident that by investing in companies that have long-term futures, we remained well positioned to deliver long-term performance. To you, our shareholders, let me highlight the fact that in June 2019, we had 48,000 customers and $3.4 billion in funds under management. Today, due to our record inflows and market-leading retention, that figure stands at more than $6 billion. And following the Christian Super transfer on Friday, we expect to have more than 110,000 customers, and our funds under management will market permitting, of course, be comfortably in excess of $8 billion. All of that while navigating market turmoil caused by global pandemics and international conflict. I'm confident that our strategy to build the scalability of our business means we are in the best position possible to take advantage of the groundswell of Australians who want to use their money for good and enjoy strong returns in the process. I'd like to conclude by again thanking you for your investment in Australian Ethical, and for joining us today. And I'd now like to hand back to Steve to open up the virtual floor so we can take your questions. Thank you.

Thanks, John. We did ask for shareholders to submit questions before the meeting. We had some questions come in. There was one shareholder asked 3 questions, but they were quite detailed and specific and we've responded to those questions directly with our shareholder. Another shareholder that we're engaging with to understand the exact nature of the information that they are seeking. Two other questions, which will come in, which we'll deal with now, while I'm giving everybody the opportunity to ask any questions to myself or John, don't forget to click on the Ask a Question button, type your question and click submit. First, well, we've got a question from James. T A James is a long-term shareholder and a significant shareholder with Australian Ethical. And he asks the following question. Over the past years, Australian Ethical has committed increasing resources to institutional fund sourcing forever decreasing returns. Record recent outflows rather than new flows. Doesn't this suggest a structural incongruity? Wouldn't it be better to cut your losses and redirect resources to better return priorities. I'll ask our Managing Director, John to respond to that question from James.

Good. Thanks, Steve. And James, thanks for the question. It's a really sensible question actually. When we ask ourselves regularly, not only about the institutional opportunity, but our whole portfolio of growth initiatives. And look, if we conclude, we can't win or there isn't sufficient margin on offer, our shareholders should understand that we will be disciplined to pull back and preserve costs. That said, specifically on the institutional opportunity. While retail investors are our heritage, we are finding increasingly that institutional investors are also subject to many of the same areas of interest in an ethical investment context. Institutions are placing environmental and social issues as a key part of their investment strategy and an approach like Australian Ethical can play a role in the solution. For example, foundations are increasingly looking towards managing their investments with the dual filter that considers both investment returns and impact and the manager like us with our heritage and experience can play a role. For larger institutional investors too, issues like climate change and broad environmental and social factors continue to expand as an area of focus for institutional investment teams. So for us, at Australian Ethical, we are currently testing the segment and offering our capabilities that best meets the needs of institutional investors. And we're having a broad range of dialogue in the area. We only hired our institutional lead Angus Denison in January of this year. So it's early days for us. And we're aware it can take time given the nature of institutional decision-making processes. But we do strongly believe through our alignment in the 36 years of ethical investing, that there is potential for us to play an important role. And certainly, the early reception we're receiving from potential investors is some cause for encouragement. But we'll continue to keep shareholders posted as we learn in this segment.

Thank you, John. And thanks again, James, for the question. We also received a question from [ Diana Duke ]. Diana is a long-term shareholder in Australia to build a significant 1 as well. And Diana asks, an Australian have to go look at the waste industry and its investments and the work being done in this foundation. The problem of dealing with waste is looming large, especially in small communities, both in Australia and overseas. Thanks, Diana, for the question. I'm going to ask Dr. Stuart Palmer, our Head of Ethics, to respond.

Thanks, Steve and Diana, for the question. Obviously, a huge issue, wastage of finite resources, obviously, but also the pollution caused to land, air and water, the amount of land we're using for increased landfill and greenhouse gas emissions from landfill. So we do need a fundamental rethink of the way we produce and consume not just better recycling the better repair and reuse to create a more circular economy. Our members -- customer statements and sustainability report this year included information about the annual revenue, which the companies we invest in earn from products and services, which are helping to meet the sustainable development goals, the SDG and some of the data reported included revenue earned from pollution prevention from activities like recycling electronics, metal and food. And for the companies we invest in across our funds, that pollution prevention revenue was about 3.5x bigger and an equivalent investment in a mainstream market benchmark. So that's just to give you an idea on a portfolio level. But as a few specific examples, we invest in Sims Metal Management, which is a metals and electronics recycler, also Rubicon Water, which helps reduce water wastage in farming and global waste management company. Veolia whose services include the capture of methane from landfill to produce electricity. And in our listed investments through the main sequence, CSIRO Innovation Fund #2, we invest in emerging companies developing better plastic recycling technologies, also packaging products, which are genuinely compostable at home. And lastly, through the Australian Ethical Foundation, we made a visionary grant to the Seabin Project in 2021, the Seabin's collect marine, debris, there are currently, I think, around 860 of them in marinas harvest ports around the world, capturing about 3,600 kilograms of waste per day, which is a bit of a sad number. They also provide important data to governments and researchers about ocean pollutants, which is informing action to stop waste entering oceans in the first place. So yes, trying to make a difference on that waste issue on a number of fronts.

Thank you, Stuart. There are no -- there have been no questions of John and myself following our addresses. So as everyone has had plenty of time, I intend to move to the formal part of the business of the meeting. With the exception of Item 1 for which no resolution is required, the following process will be followed for each resolution. I will read the resolution being put to the meeting, I will not ask for movers or seconders. The resolution and relevant proxies will be displayed on the screen. Gerald is participating online through the virtual meeting can ask questions as we come to each of the formal items of business, again by clicking on the Ask a Question button. I encourage you others to send to their questions as soon as possible. Questions relevant to matters on the agenda will be addressed at that part of the business. If the questions are of a similar nature, I will group them and respond thematically. When there are no further questions, we will then move to the next item of business. Any questions that are not directly relevant to the business of the meeting will be answered by the Company Secretary after the meeting. When it comes to items dealing with the reelection of directors, we will play a short pre-recorded speech from each director standing for reelection and deal with any questions that may have been received at that point. I will follow the order in which the resolutions appear on the notice of meeting. Moving on to voting procedures. Voting on the resolutions will be conducted by way of a poll. As this is an online meeting, shareholders are able to cast their vote using the electronic voting card when they received -- that they received when the registration online was validated. You must be logged into the online platform as a shareholder to cast a vote. Voting card is reflected at both the top and bottom of your screen. Once selected, please enter the relevant details to validate your card. Once validated shareholders may vote at any point during the meeting until I indicate voting closure, which we did just before the end of the meeting. At this point, a 5-minute countdown signal will close the -- signal the closing of voting, as well as the instructions displayed on the screen, please refer to the virtual annual meeting online portal guide or use the help line specified for further assistance on how to vote if you need it. During the meeting, we will display on the presentation slides the number of direct and proxy votes received prior to the meeting on each resolution. [indiscernible] of Lincoln Market Services is the returning officer for this meeting. As I said, all resolutions are being put to a poll. I confirm that in accordance with the notice of meeting and proxy form, where undirected proxies have been given to me in my role as Chairman, I will vote those proxies in favor of the resolution. As advised after the votes have been counted, the results of the polls will be released to the ASX and will be displayed on the company's website. I will now move to Item 1 of the formal business accounts. Item 1 provides for the meeting to receive and consider the financial statements of the company and its controlled entities for the year ended 30th of June 2022 and the related directors' report and auditor's report. These documents have been made available to shareholders in accordance with their communication preferences. For the purposes of the Corporations Act, I table the financial accounts directors' report and auditor's report for the meeting -- for the meeting. No resolution is required in relation to Item 1, but I invite shareholders to ask questions on the financial statements for the year ended 30 June 2022 and the related directors' report, auditor's report, including any questions of the auditor on matters relevant to their work. I'll give shareholders a minute or so to submit any questions. There being no questions, no resolution required. I'll move to the item of the business, #2. And this is the adoption of the remuneration report. The resolution here is that the remuneration report as set out in the annual report for the financial year ended 30th of June 2022 to be adopted. On newer screen, you should see the current voting by proxy having been received before proxies closed on Monday morning. So again, the resolution is that the remuneration report as set out in the annual report for the financial year ended 30 June 2022 to be adopted. Are there any questions from shareholders? There being no questions, I shall move to the next item of business. As I said, the final voting, including the votes that are cast today, will be available -- will be announced to the ASX and available on our website. We think towards this afternoon or towards the end of the day anyway. So the third item of business is the reelection of Kate Greenhill. And the resolution is that Kate Greenhill direct to be reappointed as a Non-Executive Director of the company. In accordance with the company's constitution, Kate is retiring from office and being eligible is standing to reelection. The Board endorses Kate's reelection. We will now view Kate's prerecorded presentation.

Thank you, Mr. Chairman. Good morning, ladies and gentlemen. Thank you for giving me the opportunity to address your meeting today. My name is Julie Orr, and I'm seeking reappointment as a Director of Australian Ethical. I've been a director for 4.5 years, having been appointed in February 2018. I'm also a member of the Remuneration Committee, Audit Risk and Compliance Committee and Investment Committee. I have over 12 years of...

Good morning. For those of you who don't know me, my name is Kate Greenhill. I joined Australian Ethical in 2013 when the funds under management was around $600 million, and the share price adjusted for the share split was approximately $0.20. It has been a pleasure and honor to work with Australian Ethical during this time. I believe the clear purpose and strong values of all who work at Australian Ethical has been a key driver of success and growth. Prior to joining Australian Ethical, I was a partner with PricewaterhouseCoopers, where I provided audit and assurance services to organizations in the financial services sector. I work with PwC for close to 20 years including 4 years in the U.K. The work I did with PwC gave me great insight into organizational structure, risk management and culture across a wide range of companies. I've also worked with a number of not-for-profit organizations. And I'm currently on the board of a not-for-profit organization in the education sector. My role with Australian Ethical includes being Chair of the Audit, Risk and Compliance Committee. During my time with Australian Ethical, the risk management framework has continued to evolve to meet regulatory expectations and to ensure that the appropriate framework is in place to support the growth and operations of the company. I spent time with both the internal and external auditors to be comfortable that we have the right controls in place and that these controls are working effectively. I believe we have a good mix of skills and experience on the Board of Australian Ethical and we are all committed to addressing the challenges and needs of the business and positioning the company for future growth. I very much appreciate your support in my reelection as a director. Thank you.

Thank you. Apologies, we had a little hiccup at the start of that by showing the start of Julie's prerecorded address, but we're over that, and thanks, Kate, for that. Are there any questions of Kate, please? No questions are coming through. So that being the case, I'll move to the next item of business, which is the reelection of Julie Orr. And the resolution is that Julie Orr, Director, be reappointed as a Director of the company. In accordance with the company's constitution, Julie is retiring from office and being eligible is standing for reelection. The Board endorses Julie's reelection. We will now view Julie's prerecorded presentation.

Thank you, Mr. Chairman. Good morning, ladies and gentlemen. Thank you for giving me the opportunity to address your meeting today. My name is Julie Orr, and I'm seeking reappointment as a Director of Australian Ethical. I've been a director for 4.5 years, having been appointed in February 2018. I'm also a member of the Remuneration Committee, Audit Risk and Compliance Committee and Investment Committee. I have over 12 years of experience as a company director, serving on both listed, unlisted, superannuation and not-for-profit boards and as an independent member on a New South Wales government Audit and Risk Committee. My directorship roles are underpinned by over 20 years as a financial services professional, with executive and leadership positions in superannuation, investments, financial advice, stock broking, insurance, acquisitions and business transformation. The Board of Australian Ethical is a highly collaborative board with a key focus on investor returns, whilst producing a positive environmental, social and governance impact. Over the last year, we have strengthened our investment credentials by appointing 3 independent committee members to our Investments Committee, and we continue to enhance our asset allocation process by the implementation of a new strategic asset allocation model. We've also continued to focus on scaling our business to ensure Australian Ethical meets the growing demands for ethical investment. We have upgraded our technology and streamlined the customer experience, launching a new fund system and an app to digitize the managed fund investor experience. Most recently, we've focused on the investment and other integration work necessary to successfully manage the transfer of Christian Super members and funds to Australian Ethical. This work continues to pay dividends for Australian Ethical with strong customer growth and numerous industry awards. We are proud of the 20% growth in retail and wholesale flows to $1.14 billion for the 2022 financial year. Our strong staff engagement was maintained throughout the year with top quartile net promoter scores. The staff and Board maintained a shared purpose that underpins our business and commitment of our people. During 2022, we successfully navigated COVID-19 by protecting our workforce and keeping our business performing. I have demonstrated the strong commercial and strategic focus to ensure the Board's strategy is agreed and implemented with robust oversight. I have sufficient time to meet what is expected of me as a Director of Australian Ethical, and I'm used to working in complex, highly regulated environments. I look forward to working on behalf of the shareholders and clients of Australian Ethical if you reelect me today. Thank you.

Thank you, Julie. Are there any questions of Julie? There have been no questions, we will be closing the meeting shortly. A final reminder to those shareholders who have not voted, you should do so now if you intend to. I will keep the online voting open for another 5 minutes. The end of that 5 minutes, I will declare voting closed, and I will close the meeting. Thank you. The 5 minutes will begin now. [Voting]

Thank you, everyone. The 5 minutes I've allowed for shareholders to complete voting, [ if they don't do ] is now expired. So I will declare voting now closed. There'll be no further business. I thank you all for your attendance today and declare the 2022 Annual General Meeting of Australian Ethical Investment closed [indiscernible]. Thank you.