The 2050 net-zero emissions goal has been adopted by a number of investors in the past year, including Aware Super, HESTA, AustralianSuper, IFM Investors, UBS Asset Management and Mercer.
But NGS Super, a $12.8 billion education and community sector fund, has promised to reach carbon neutrality by a much closer deadline of 2030, a date it claims no other super fund has vowed to.
While the net-zero goal refers to a balance between greenhouse gas emissions produced and emissions taken out of the atmosphere, NGS Super’s carbon-neutral goal is defined in terms of carbon dioxide (CO2).
CO2 is only one of the factors for emissions, but it is the largest contributing chemical – in 2018, it comprised 81 per cent of total greenhouse gases emitted.
Regardless, NGS Super chief investment officer Ben Squires noted his fund’s policy is closer in line with scientific guidance.
“We acknowledge that pursuing a carbon neutral target date of 2030 is ambitious, but we also believe a 2050 target is misaligned with the timeframes the scientific community has given in relation to stemming human-induced climate change,” Mr Squires said.
Super funds now control how $3 trillion in assets are invested, which could have a significant role in shifting the dial on climate change, NGS Super stated.
There has been some action in the industry, but the fund has warned that if climate change is not acknowledged in investment portfolios more immediately, the quickly shifting landscape will present further risk to Australians’ retirement savings.
“This is as much about mitigating investment risk as it is about mitigating climate change risk,” Mr Squires said.
NGS Super has also promised to prioritise engagement with corporates over dumping holdings and to pursue neutrality without purchasing carbon offsets, where possible.
“Divestment of some companies and stocks will be necessary to achieve our 2030 target, but first and foremost, we will use engagement to effect change, as well as seeking out positive investments in companies and businesses that are actively looking to transition to the low carbon economy,” Mr Squires said.
“Our focus will be on carbon reduction and investing in carbon positive assets or companies in areas such as clean energy infrastructure (wind and solar projects), storage infrastructure, or grid technology.
“We’ll access these opportunities in several ways, including investing in infrastructure or private equity funds, direct project-level investment, securitised bonds or equity, investing in green buildings or funding the balance sheets of corporate developers in both debt and equity.”
