In the fund’s most recent Climate Risk report released on Thursday, UniSuper chief investment officer John Pearce said that the COVID crisis had sped up the process of decarbonisation, which was expected to be a key plank of the post-pandemic recovery.
“It’s becoming quite apparent that countries with no formal commitment to achieve net-zero emissions will find themselves on the outer when participating in global forums,” Mr Pearce said.
“Furthermore, one could expect that any lack of commitment to Paris will inevitably impact a country’s ability to negotiate trade agreements with G7 countries, and could also deter some sources of foreign capital inflow.”
The super fund’s report revealed that 40 of its top 50 portfolio companies now had operational targets to meet the Paris climate benchmark of zero emissions by 2050, and 66 per cent of investments in total had set the targets in place.
Just 2.55 per cent of UniSuper’s investment portfolio was exposed to fossil fuels and 0.4 per cent to direct fossil fuel extraction, with 26 per cent of investment expected to be fully carbon-neutral by next year.
Mr Pearce told the ABC on Thursday that it was “more urgent than ever” for Australia to get to a net-zero target by 2050, and that at present decarbonisation efforts were being led by major corporates.
“Corporate Australia and indeed corporates around most of developed world are just getting on with it,” he said.
“We hear a lot about Australia as a country not coming to net zero by 2050. My colleagues and I are going to be a little bit embarrassed if the Prime Minister fronts up at the end of the year and we still haven’t made that commitment.”
The comments came as the US deputy special envoy on climate Jonathan Pershing told the Better Futures Forum climate conference on Thursday that Australia’s commitments to a 26 to 28 per cent reduction of emissions from 2005 levels by 2030 were targets that “had been overtaken by events”.
“I think most recently the IPCC suggests that we need a much more aggressive total from all nations. It would be helpful to see Australia step forward with a more ambitious effort,” Mr Pershing said.
“Australia is one of the wealthier countries in the world, its emissions are at about 1 per cent of the global total, but at 1 per cent, it falls into nearly the top 20 of national emitters. There are hundreds and hundreds with much smaller shares. If a wealthy country like Australia is unable to move forward, it’s very hard for poor nations to think how they might do it.”