Funds need to position for climate change or lose returns

26 November 2020
| By Jassmyn |
image
image image
expand image

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.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year 6 months ago
Kevin Gorman

Super director remuneration ...

1 year 6 months ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year 6 months ago

Vanguard Super has reported strong returns across most of its investment options, attributed to a “low-cost, index-based approach”. ...

2 days 22 hours ago

The fund has achieved double-digit returns amid market volatility, reinforcing the value of long-term investment strategies for its members....

2 days 22 hours ago

Australian super funds notched a third consecutive year of strong returns, with the median balanced option delivering an estimated 10.1 per cent over the 2024-25 financia...

2 days 22 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5