HESTA has announced that it has achieved its initial climate target of a 33 per cent reduction in normalised portfolio emissions by 2030 — against a 2020 baseline — eight years ahead of schedule.
Released on Friday, HESTA’s second climate report outlined its approach to managing climate-related risk in support of net-zero emissions by 2050, and detailed the progress it has made towards meeting its climate change transition plan (CCTP).
Notably, HESTA upped its interim target to 50 per cent reduction in normalised portfolio scope 1 and 2 emissions by 2030 in September last year, which the fund said was in recognition of developments in relation to climate change, including updated scientific research and the Australian government’s increased commitment.
Chief executive officer Debby Blakey said HESTA is pleased with the progress it is making towards implementing its CCTP.
“Managing climate-related risks and capitalising on opportunities helps us as a long-term investor to generate strong long-term returns for our members,” Ms Blakey commented.
“Climate change presents a complex systemic risk for investors to manage – there’s no silver bullet, with long-term investors needing to use many approaches to position their portfolios for a low-carbon future.”
On Friday, the fund reiterated its commitment to investing 10 per cent of its investment portfolio in climate solutions, such as renewable energy and sustainable property, by 2030.
“It’s clear the world needs greater action to address climate change, so we need to continually adjust and advance our approach to the management of climate-related risks as circumstances change,” Ms Blakey reasoned.
“We believe now is the time to get ahead of the carbon tsunami that will hit if we don’t start dealing with net zero this decade. Mitigating climate-related risks requires an accelerated transition and a more ambitious approach to emissions reductions.”
In line with this, HESTA signed a Platform Agreement with ASX-listed company ReNu Energy last November, enabling potential co-investment by ReNu Energy and HESTA in selected green hydrogen projects.
The fund also confirmed that it had established a renewable energy platform, Intera Renewables, with investment partners. Initial seed assets in the platform include four wind farms and a solar farm across four states.
Ms Blakey said investments like these demonstrate how HESTA is looking at ways to invest efficiently and at scale in transition opportunities.
“Australia has the potential to become a global leader in renewable energy generation that will help attract global capital, support economic growth and drive long-term value for investors.”
“Throughout 2023 and beyond we’re continuing to focus on opportunities to invest in developing innovative technologies and businesses at the forefront of decarbonisation,” she concluded.
According to HESTA, it is the first carbon neutral super fund for emissions produced from its business operations.