Construction industry super fund Cbus Super is targeting a 45% reduction in its absolute portfolio emissions by 2030 and net zero emissions by 2050.
As part of its two-year Climate Change Roadmap, Cbus Super, which had an average member age of 39, said it was the firm’s responsibility “to see our members retire securely in a safe climate”.
Chief investment officer Kristian Fok said: “It’s our responsibility to safeguard their investments as the financial impacts and physical effects of climate change intensify”.
In order to achieve its target, the fund would reduce its portfolio emissions by investing further in renewable energy and climate solutions and a focus on green recovery as well as setting individual targets for different asset classes.
It would also work to understand companies that were at risk of not transitioning due to the products they produce or lack of management capability, known as ‘stranded assets’. These constraints would be introduced into the firm’s internal quantitative portfolios.
“Cbus is able to help reduce emissions in the real economy and avoid assets that will increasingly become stranded as the economy transitions. We have been doing a significant amount of work to determine those assets that aren’t able to transition to a net zero environment, and this work will ramp up under our new road map,” added Fok.
In light of its updated target, the firm was the first Australian financial to sign up to the United Nations Convened Net Zero Asset Owners Alliance, whose members had over $4 trillion in assets under management.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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