AusSuper eyes zero emissions

The nation’s biggest superannuation fund, AustralianSuper, has joined a group of other industry funds in targeting net zero emissions by 2050.

The fund said it had reduced the carbon intensity of its equities portfolio by 44 per cent between 2013 and 2019. Photo: Erin Smith.

The nation’s biggest superannuation fund, AustralianSuper, has joined a group of other industry funds in targeting net zero emissions by 2050, in line with the Paris Agreement.

The fund, with $180bn in assets under management, said on Thursday that adoption of the target would reduce the impact of climate risk on the portfolio’s long-term investment performance.

“It is in members’ best interests that AustralianSuper positions the portfolio to a net zero outcome,” director environment social and governance Andrew Gray said.

“This is in line with global market expectations and consistent with our goal of maximising members’ long-term investment returns.”

The other funds to have made the commitment are UniSuper, the industry fund for university workers, the health and community sector workers’ fund HESTA, and the construction and mining industry fund Cbus. A further 13 funds are reportedly looking to cut the emissions intensity of their portfolios.

Aware Super, formerly First State Super, said in July it would divest from thermal coal miners and reduce emissions in its listed equities portfolio by at least 30 per cent by 2023. AustralianSuper’s decision was endorsed by the board at its October meeting, with the fund having measured the carbon intensity of its equity portfolios since 2013 through an external consultancy, S&P/Trucost.

The fund said it had reduced the carbon intensity of its equities portfolio by 44 per cent between 2013 and 2019, and its Australian and international portfolios emitted 44 per cent less carbon than the market index.

“AustralianSuper will aim to achieve a net zero position through direct company engagement and by working with other investors through initiatives like Climate Action 100+, the Australian Industry Energy Transitions Initiative and Climate League 2030,” Mr Gray said.

“In making the net zero 2050 commitment, we have undertaken significant analysis to understand the sources of emissions in the portfolio and the progress we’ve already achieved to reduce these.

“This will enable us to take a measured and structured approach in achieving net zero 2050, including reporting our progress.”

The move by AustralianSuper follows National Australia Bank’s announcement on Wednesday that it was likely to exit thermal coal by 2030 instead of 2035, and would engage with its top 100 carbon-emitting clients to help them to transition to net zero by 2050.