Funds need to position for climate change or lose returns
Superannuation funds that are not positioning their portfolios to address climate change are not achieving their purpose of providing strong long-term sustainable returns, according to Aware Super.
Speaking on a climate change panel, the fund’s chief executive, Deanne Stewart, said climate change was one of the biggest risks and funds needed to make sure they adjusted their portfolios accordingly if they wanted to provide sustainable long-term returns.
“It’s not to do with activism, it’s to do with getting ahead of the trend, protecting members and looking for great opportunities. What you don’t know is when things are going to happen but you know that they will so if you’re not positioning accordingly you’re putting your members at risk,” she said.
Stewart said words and setting goals were important, but they meant little unless funds had specific actions on how they were going to achieve them.
“It started with setting 2050 net zero emissions but working back from there, within the next decade to meet the Paris agreement what do we need to do in our portfolio? Where do we think different companies are likely to move?” she said.
“We have to look at physical risk, reputational risk, and financial risk, and it impacts so many more sectors than we think. We’re talking about agriculture, health, construction, and so on.
“With our portfolio we’re looking at transitioning that over the next decade to reduce emissions by 45% and then importantly over the next three years reduce by 30% in our listed equity portfolio. We think that’s getting ahead of the trend and that will provide better opportunities and protect our members over most other funds.”
Recommended for you
The winners have been announced for the 2025 Super Fund of the Year Awards, held in Melbourne on 26 November.
Australian Ethical Superannuation has seen additional licence conditions imposed on it by APRA over the fund’s expenditure management.
The fund has strengthened its leadership team with three appointments to drive its next phase of growth and innovation.
ASIC and APRA have warned many trustees have failed to meaningfully improve retirement strategies despite the retirement income covenant being in place for three years.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
220.82 3 y p.a(%)
2
Loftus Peak Global Disruption Fund Hedged
110.57 3 y p.a(%)
3
Quay Global Real Estate Fund (Unhedged) Active ETF Hedged
89.04 3 y p.a(%)
4
SGH Income Trust Dis AUD
80.18 3 y p.a(%)
5
Global X 21Shares Bitcoin ETF
76.11 3 y p.a(%)
