Climate Change Position Statement
As an ‘all profit-to members’ super fund, we care about making a positive difference to our members' lives by helping to set them up for a better future. An important part of this is investing members' retirement savings responsibly. This includes managing the financial risks and opportunities related to climate change.
Climate change and its impacts
‘Climate change’ refers to increases in global average air and ocean temperatures. The impacts include melting of snow and ice, rising global sea levels, changes to atmospheric and ocean circulation and potential changes in weather patterns. All these changes have been attributed to human-produced carbon emissions.
Climate change may present significant economic and social risks to current and future generations. Its impacts may damage vulnerable populations and geographies and lead to economic disruption across a wide range of sectors and businesses in which we invest.
Global action on climate change
In December 2015 the United Nations Framework Convention on Climate Change (UNFCCC) resulted in the ‘Paris Agreement’, which aims to strengthen the global response to the threat of climate change by limiting global warming to below two degrees Celsius and move towards net zero emissions by 2050.
Since then, Governments around the world have introduced policies and initiatives to reduce emissions including committing to net zero carbon emissions by 2050. Such action presents both risks and opportunities for global investors like CareSuper.
Our commitment to net zero emissions by 2050
As a large investor, CareSuper is committed to achieving net zero carbon emissions by 2050 for its investment program, in line with the Paris Agreement.
This commitment is aligned with our ongoing program of initiatives to deliver sustainable investment outcomes in the best financial interests of our members.
Research shows that transition and physical risks of climate change will likely negatively impact portfolio value if we do not act to mitigate climate risk.* At the same time, committing to net zero will help us take advantage of potential investment opportunities to create value for our members as we transition to a low carbon economy.
Climate Change risks and opportunities
So what are some of these risks and opportunities?
- The potential for physical damage to assets due to the effects of climate change (e.g. rises in sea levels, and/or extreme weather conditions such as droughts, fires or floods)
- Changes to regulation as governments around the world move to reduce emissions (e.g. the introduction of a carbon tax could adversely affect long-term investment returns for carbon intensive industries such as thermal power generation, agricultural, steel production and general manufacturing).
- The potential to invest in renewable energy and other less carbon-intensive industries
- The emergence of new industries aimed at mitigating the impacts of climate change (including an increased demand for certain products and services).
Our actions to address climate change
So how do we deal with climate change at CareSuper?
- We require our investment fund managers across all asset classes to comply with our Responsible Investing Policy.
- We regularly engage with all our investment managers on how they respond to environmental, social and governance (ESG) issues.
- Under our Proxy Voting Policy, we support reasonable proposals requesting companies to disclose their approaches to managing climate change and reducing greenhouse gas emissions.
- We work with peak industry bodies to share knowledge and increase awareness of climate change, as it applies to investment decision-making.
- We’re a founding member of the Australian Council of Superannuation Investors (ACSI). ACSI engages with companies, regulators and other rule making bodies on climate change issues on behalf of CareSuper.
- We encourage companies to disclose climate change risk in accordance with the Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations, via ACSI and our investment managers.
- We’re signatories to a number of other organisations aiming to address climate change and other ESG issues. These include:
- Our investments include those that should prove resilient to the impacts of climate change and/or will benefit from the transition to a low-carbon economy (e.g. renewable energy and water-related investments).
- We offer investment choices that allow our members to avoid or reduce their exposure to thermal coal investments through our Sustainable Balanced and our Direct Investment options.
- We reduce our own greenhouse emissions by continually assessing and improving the energy efficiency of our offices.
- Through our Sustainability Committee, we aim to raise awareness of ESG issues, including the potential impacts of climate change, by our staff, members, suppliers and partners.
We will continue to build on the actions we are already taking to manage climate change risks and opportunities.
We will also monitor emerging risks, research and market practices on climate change in order to respond appropriately in our investment activities to ensure the best financial outcomes for members.
*Source: TCFD 2017, ‘Final Report: recommendations of the Task Force on Climate-related Financial Disclosures’, https://assets.bbhub.io/company/sites/60/2020/10/FINAL-2017-TCFD-Report-11052018.pdf