Prince Charles urges Australian super funds to invest in natural capital

Prince Charles has urged Australian superannuation funds to support his green finance initiative and invest to improve the health of the planet.

Prince Charles has called on Australian superannuation funds to support his green finance initiative and use their investment clout to improve the health of the planet.

Giving the keynote speech at the AIST’s major super funds conference in Adelaide on Tuesday, Charles, a long-time environmental activist, also urged superannuation funds to move faster on their path to bring their portfolios to net zero emissions. At the same time his Terra Carta initiative is developing investment support to reduce fertiliser run-off which impacts the Great Barrier Reef.

His comments come as some of Australia’s biggest super funds have become more active on environmental and governance strategies in recent years. The nation’s biggest fund, the $200bn AustralianSuper, has made a commitment to achieve net zero carbon emissions by 2050 in the investment portfolio.

Investment strategies that considered climate risk, coupled with zero-emission timetables, would have a big impact in driving the low carbon transition of companies, not only in investment portfolios, but in the wider economy, Prince Charles said.

“I am enormously encouraged to hear of the ambition of several Australian superannuation funds to achieve net zero carbon emissions in their investment portfolios”.

“They will be doing so in the best financial interests of their members, given the risks that global warming and climate change present to each fund’s long-term investment performance,” Prince Charles, who appeared via video link, told conference attendees.

The time had come to align sustainable solutions with funding in a way that could transform the marketplace, he said.

“My great and abiding hope is that by COP26 (the United Nations Climate Change conference) in November we will see global financial institutions, such as superannuation funds, announce to their members and shareholders their own road maps that define the steps they will take to bring their portfolios more rapidly to net zero.

“After all, there are trillions of dollars in sovereign wealth funds, pension funds, insurance and asset portfolios looking for investible projects that are genuinely sustainable, with good long-term value and strong rates of return.”

The appearance of the senior royal at the conference comes months after he launched his Terra Carta, or Earth charter. It is his road map to 2030 for businesses to move toward a sustainable future.

The collective, ambitious action of the sustainability initiative would put nature, people and planet at the heart of global value creation, he told the super fund attendees.

“We want signatories to work to ensure that investment and financial flows are consistent with a low carbon and nature-positive future.

“Through this approach we will demonstrate that investing in sustainability and building prosperity are not mutually exclusive. After all, a sustainable future is the growth story of our time, he said.

One of the first actions of the Terra Carta was the creation of an investment alliance, the Natural Capital Investment Alliance, that aims to improve the flow of capital toward nature. It is targeting $10bn to flow to natural capital by next year.

Some of the investment propositions developed by the Natural Capital Investment Alliance were particularly relevant for Australia, Prince Charles said.

These include reducing fertiliser run-off from farm activities onto the Great Barrier Reef and improving farm soil quality.

“Adopting these more sustainable practices provides the opportunity to preserve the long-term productivity of the farmland while also being positioned to capture additional income from the soil carbon and, potentially, from Queensland ‘reef credits’.

“These are examples of initiatives that create financially attractive investment incentives for project developers and investors and, importantly, incentivise farmers to change practices – turning impacts on the ground into additional revenue streams.”

Australia‘s own advisory firm Pollination Group was singled out by the heir to the British throne for taking a leadership position as a founding partner of the alliance.

“By triangulating country priorities, industry priorities and investment priorities, we have a unique opportunity to build the genuinely sustainable markets we require to achieve a durable future,” Prince Charles said.

“Your superannuation funds have been pioneering leaders in social justice for older Australians and this is an opportunity to further advance your leadership to improve the health of our planet for the benefit of future generations.”