Manage portfolio to Net Zero emissions by 2050
AustralianSuper has made a Board approved commitment to achieve Net Zero carbon emissions in its investment portfolio by 2050. The Fund is implementing a comprehensive Net Zero 2050 transition program across its Investment, Stewardship, Measurement & Disclosure and Collaboration & Advocacy activities to reduce emissions in the portfolio. A Climate Change Committee and working groups have been established to manage, monitor and measure progress against Net Zero 2050 goal. Actions and progress are regularly reported to the Board and Investment Committee. Significant work is being undertaken to understand the emissions profile of the portfolio and its future trajectory. We are identifying the largest emitters in our portfolio to focus our stewardship actions to have greater influence over climate change outcomes. AustralianSuper is undertaking further carbon footprinting analysis to measure and report the carbon intensity of our unlisted assets. We publicly disclose our actions and progress in our TCFD report published on our website. This includes an update of carbon footprinting analysis of our equities and fixed interest portfolios since 2013.
Investing in line with the goals of the Paris Agreement
Have investments of more than $1 billion in renewable energy projects by the end of 2022
As a large investor of capital, AustralianSuper can lower carbon intensity by investing into lower emissions companies, such as those in the renewable energy sector. AustralianSuper currently invests in a range of renewable energy projects across markets in its infrastructure and equity portfolios. AustralianSuper has committed to have investments of more than $1 billion in renewable energy projects by the end of 2022 and expects this allocation to increase over time.
Reducing carbon in equity portfolios
AustralianSuper integrates climate change in its investment policy, process and disclosures and is working to consistently reduce the carbon exposure in its equities portfolios:
- Climate change is identified in the Terms of Reference of AustralianSuper’s Investment Committee, which has responsibility for investment portfolio management on delegation from the Board.
- Our TCFD report publicly enunciates AustralianSuper’s climate change beliefs and support for the Paris Agreement goals and a net zero 2050 economy.
- We integrate climate change considerations at significant points in our investment process including due diligence prior to ownership and then once we own an asset.
- Carbon intensity measurement over the last six years demonstrates a low carbon transition in the equities portfolio is underway. AustralianSuper’s international portfolio is currently 44% less carbon intensive than its benchmark and the domestic portfolio is 17% less carbon intensive.
Comprehensive climate change engagement
AustralianSuper has identified the most emissions intensive companies in its portfolio and developed an engagement strategy seeking low carbon transition:
- AustralianSuper is a founder, global steering committee member and previous Chair of Climate Action 100+ (CA100+), which advocates for Paris-aligned carbon emissions reductions and improved climate change governance and disclosure in 160 of the world’s largest emitting companies.
- AustralianSuper has an engagement program with internally held ASX-listed companies and unlisted assets for an articulation of net zero business strategies and actionable progress on emissions reduction trajectories. We have developed ownership plans to monitor and manage progress for emissions intensive companies. We are working to incorporate the CA100+ Net Zero Benchmarking framework into the ownership plans.
- AustralianSuper has and will continue to report on the resulting low carbon transition that is occurring in the portfolio in its TCFD report.
Partner of the Australian Industry Energy Transitions Initiative
AustralianSuper is a partner of the Australian Industry Energy Transitions Initiative (ETI) to work directly with some of Australia’s largest companies in hard-to-abate sectors to accelerate emissions reductions across their value chains. AustralianSuper is the only institutional investor partner in Australian Industry ETI and this collaboration will enable us to work with industry to develop pathways for emissions reductions across five supply chains: steel, aluminium, liquified natural gas, other metals and chemicals. Collectively, these sectors contribute more than a quarter of Australia’s annual emissions and generate exports worth around $160 billion. The Australian Industry ETI will also provide insights into new opportunities arising from the transition of Australia’s economy, and help to reduce the overall costs of the transition to net zero emissions by encouraging early action. AustralianSuper will integrate learnings from the Australian Industry ETI into its engagement program and benchmarking framework with investee companies.
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