Australian Ethical Investment Ltd (ASX: AEF) has made an important call on one particular S&P/ASX 200 Index (ASX: XJO) share, resulting in the sale of all of its Lendlease Group (ASX: LLC) shares.
Australian Ethical aims to offer investors investment options that invest with the ethics that align with the investor.
But, while it may be easy enough to exclude fossil fuels, gambling and other industries like that, it can be a trickier decision about whether to exclude a business that makes a new move that does not align with Australian Ethical's ESG investing criteria.
That means Australian Ethical looks to evaluate businesses based on environmental, social and governance factors.
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Australian Ethical sells Lendlease shares
According to reporting by The Australian, the fund manager decided to sell of its shares in construction and infrastructure business Lendlease.
The reason for the sale is that the Lendlease housing development project Mt Gilead in NSW will hurt a koala colony.
In a blog post, Australian Ethical wrote about the ASX 200 share:
The survival of the Mt Gilead koala colony hinges on the existence of appropriately sized wildlife corridors to provide safe passage across the site, according to advice from the Office of the NSW Chief Scientist and Engineer (OSCE).
We have serious concerns about the way the reports from the OSCE are being interpreted by the NSW Department of Planning & Environment (DPE) and Lendlease and the lack of transparency around public consultation to date.
Even the NSW Government's own environment protection body, the Environment and Heritage Group (EHG) has found that the current Lendlease proposal is inconsistent with the recommendation from the OSCE.
In our opinion, Lendlease has failed to produce critical information needed to independently assess the impact of its housing development on koalas.
That's why we've sold our shares.
We're calling on the NSW Minister for Environment & Heritage, the Hon. James Griffin MP to intervene by committing to a transparent public consultation.
Without this, we cannot be confident that this koala colony will survive the developments proposed for the area.
Australian Ethical also said it has concerns about another Lendlease development, Shoreline, in South East Queensland which "also has the potential for negative biodiversity impacts."
Australian Ethical said it has sold its debt and equity positions in Lendlease and related vehicles, it will also sell its investment in an unlisted property trust, which is managed by Lendlease, "at the first available opportunity".
According to reporting by The Australian, Australian Ethical reportedly owned around 1.6 million Lendlease shares, worth around $11 million.
Lendlease share price snapshot
Over the past six months, Lendlease shares have fallen by around 30%. Since 3 February 2023, it's down by over 20%.
