NGS Super has revealed that it is making “faster than expected” progress on its 2030 goal of reaching a carbon-neutral investment portfolio, with the fund highlighting an increased need for businesses to address climate change more strategically.
In a statement on Thursday, NGS explained that the measurement of carbon intensity in its Diversified MySuper portfolio fell by nearly 20 per cent between 30 June 2021 and 30 June 2022, approximately 13 per cent ahead of the required trajectory to carbon-neutrality.
The fund has announced an interim target of 35 per cent less emissions by 2025 - from a 30 June 2021 baseline - and aims to become carbon-neutral by 2030.
Ben Squires, NGS Super chief investment officer, said that the initial target, first set two years ago, was made because it was the best action for “our members and for our planet”.
“We’re now tracking ahead of schedule, we’re continuing to protect our members’ returns, and demonstrating how to effectively make the transition to a carbon neutral portfolio,” Mr Squires explained.
He assured that “ups and downs” are expected during this process, as many companies and industries may see an increase in carbon intensity while they develop more sustainable low-carbon operating models.
“Importantly, super funds need to be flexible to ensure members’ financial interests are protected. We also need to allow businesses that we believe are genuinely committed to action on decarbonisation the time and opportunity to achieve their goals – but this doesn’t mean targets can’t be accelerated either,” Mr Squires added.
Since the start of its decarbonisation process, the fund said that it has divested $191 million from carbon-intensive companies and industries, such as Woodside and Santos.
Instead, it said that promising opportunities are likely to be found in either private equities that are involved with carbon capture and storage technology initiatives, or carbon funds that invest in sustainable forestry and farmland.
“We know that there’s still much to learn around striving for the most effective decarbonisation process, but we’re confident we can achieve our targets whilst always acting in our members’ best financial interests. Our divestments haven’t affected investment returns and have reduced our portfolio’s exposure to climate change transition risk,” Mr Squires concluded.
To meet its targets, NGS said it expects to complete more work around carbon-positive investments, such as carbon capture utilisation and storage, and develop a better understanding of the factors that may affect how carbon markets evolve, such as regulation, liquidity and transparency.
In March, NGS fell victim to a cyber incident and confirmed that some of its systems had been accessed by an attacker for a short period of time.
At the time, NGS said that members' super savings and the fund's assets remained secure on separate platforms.
“We can confirm that your super savings are secure and have been secure at all times,” the fund told its members.