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Leading the way on Paris targets

Promoted by UniSuper

As Australia’s largest investor in environmental, social and governance (ESG) themed strategies, we’ve made significant progress on becoming a net-zero emissions fund by 2050.

Leading the way on Paris targets
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  • UniSuper
  • September 22, 2021
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At UniSuper, we know that climate change, and the way we respond to it, is an important issue. We unequivocally accept the science of climate change and understand that decarbonisation is essential and urgent. 

We also understand that climate change will significantly impact investments, which is why our investment team factors environmental, social and governance (ESG) considerations into their decision-making across all our investments. 

As a fund, we’re committed to playing a leadership position on climate change and will continue to evolve our approach in line with global best practice. 

Our sustainable path to 2050

We’re committed to achieving net-zero absolute carbon emissions in our investment portfolio by 2050, in alignment with the Paris Agreement. We’ve already made significant progress, with 40 of our top 50 Australian investments setting Paris-aligned targets (up from 34 in 2019-20). 

At the core of our position on climate change is our acceptance of the scientific consensus that human activity is a significant contributor to the warming of the planet. Global warming represents a long-term risk to societal wellbeing, economic growth, and by extension, the retirement outcomes of our members. 

Writing in our fourth edition of Climate risk and our investments (our annual climate risk report), Chief Investment Officer, John Pearce, says decarbonising the economy will be one of the most significant investment themes for at least the next decade.

The report’s key updates include:

  • 40 of our top 50 Australian investments now have Paris-aligned targets, with another five committing to setting targets this year.
  • 66% of investments across our entire portfolio now have Paris-aligned targets (up from 51% 12 months ago).
  • 0.4% of the fund is exposed to fossil fuel producers, with overall fossil fuel exposure down to 2.55% from 5.05% last year.
  • 26% of our portfolio is, or will be, carbon neutral or net-zero by 2022. This includes our $2.6 billion direct unlisted property portfolio.
  • We’ve achieved carbon neutral status for our own operations.

We’ve achieved this progress by divesting some positions, eliminating holdings in companies that generate more than 10 per cent of revenue from mining thermal coal, and not adding to existing positions as the portfolio has grown.1

We aim to be at the forefront of the super industry as we transition to a low carbon world. Our climate change position statement outlines the scope of our commitments.

Sustainable and environmental investment options

With over $12 billion in funds under management across our sustainable and environmental investment options, we’ve solidified our position as Australia’s largest investor in ESG themed strategies.

We have three sustainable and environmental investment options available to members—Sustainable Balanced, Sustainable High Growth, and Global Environmental Opportunities.

Members who invest in these options are investing in companies leading the way in sustainable business practices or addressing global environmental challenges. Importantly, they’re also not investing in fossil fuel exploration and production, weapons, gambling, alcohol, or tobacco.

Strong performance

There’s a noticeable performance trend when it comes to sustainable and environmental investment options. Our investment options have delivered consistent returns and have increasingly grown in popularity among members over recent years.2

  • Sustainable High Growth, launched in 2002, has delivered 24.6% in the 12 months to 30 June 2021, and 11.7% p.a. over 10 years.3.4
  • Sustainable Balanced, launched in 2008, has delivered 17.1% in the 12 months to 30 June 2021, and 9.6% p.a. over 10 years.3.4
  • Global Environmental Opportunities, launched in 2012, has delivered 48.9% in the 12 months to 30 June 2021, and 17.0% p.a. since inception.4

While past performance isn’t guaranteed to repeat, the emerging trends behind these options—including solar power, wind power, batteries, electric vehicles—are strong, and can be expected to continue for some time. 

Read Climate risk and our investments, our climate risk report.

 


1 Learn more about our thermal coal exclusion and its limitations.

2 Past performance isn’t an indicator of future performance. This information is of a general nature only and includes general advice. It’s been prepared without taking into account individual objectives, financial situation or needs. Before making any decision about your super, you should consider your circumstances, the relevant UniSuper product disclosure statement and target market determination available at www.unisuper.com.au, and whether to consult a licensed financial adviser. Issuer: UniSuper Limited ABN 54 006 027 121 as trustee of UniSuper ABN 91 385 943 850.

3 Average investment returns p.a. for the 10 years to 30 June 2021.

4 Returns quoted are for accumulation investment options, after fund taxes and investment expenses, but before account-based fees.

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