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Cbus moves on climate risk

Lachlan Maddock
— 1 minute read

The $54 billion super fund has become the latest to go green, announcing ambitious emissions targets and warning that it will drop assets at risk from climate change.

Unveiling a new climate change roadmap, Cbus has set a target for a 45 per cent reduction in its absolute portfolio emissions by 2030 and locked in a commitment to achieve net zero by 2050. 

“The average Cbus member is 39 years old,” said Cbus Super CIO Kristian Fok.

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“It’s our responsibility to safeguard their investments as the financial impacts and physical effects of climate change intensify… The course that we have charted will see Cbus reduce our portfolio emissions while investing further in renewable energy and climate solutions, as well as avoiding ‘stranded assets’ as the economy transitions.”

Cbus said it had already undertaken “significant work” to understand companies that are at risk in the transition due to their products or a lack of management capability and will develop a stranded assets framework, building on work that has already resulted in a number of high-risk climate holdings being reduced or removed from the portfolio. 

“The economy of 2030, let alone the economy of 2050 is going to look very different from what we have experienced over the last few decades,” Mr Fok said. 

“That poses risks for long-term investors like Cbus. There are assets that simply won’t see out their traditional economic life.”

Cbus will also develop pathways to achieve portfolio targets for each asset class, including equities, and is the first Australian financial institution to join the United Nations-Convened Net-Zero Asset Owners Alliance. 

“Cbus recognises that to decarbonise the global economy in line with the Paris Agreement requires collective action,” Mr Fok said. 

“Members of the Asset Owners Alliance [have] over $4 trillion in collective assets under management. Cbus is determined to play our part in these global advocacy efforts.”

Cbus has become the latest large super fund to make a move on climate policy, joining HESTA and First State, which have both announced emission targets and are actively exploring opportunities for the economic transition.

 

Cbus moves on climate risk
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