Healthcare industry super fund HESTA has unveiled a radical new plan to make it greener and more sustainable.
The fund has pledged to reduce absolute carbon emissions from its investment portfolio by $ 52 billion by 33% by 2030.
And by 2050, HESTA plans to achieve carbon neutrality in investments and operations.
This decision is the first of a large Australian super fund and will see him refuse to invest in companies which derive more than 15% of their income from thermal coal.
It also committed to carrying out an annual review of carbon emissions across its portfolio starting in July.
“Our climate change transition plan [CCTP] is one of the most comprehensive of its kind undertaken by a pension fund, defining how we will manage climate risks, aligning our actions with a world below two degrees and support the transition to a low-carbon economy, “said Debby Blakey, CEO of HESTA.
“We were very thoughtful about how we worked through it. Climate change is a real and material risk – we are very clear that it poses a financial risk to our portfolio, ”said Blakey.
Here’s the deal
Consistent with the commitment, Blakey said that the HESTA approach will involve three objectives:
- “Active property. This means a strong commitment with the organizations in which we invest and the asset managers with whom we work in partnership to use our seat at the table and use our voice to support this transition to a low carbon balance sheet. “
- “Consider how we are investing in particular in renewable energy to support this transition to a low carbon economy.”
- “Pay attention to companies we don’t invest in,” said Blakey
“Climate change poses financial risk to HESTA’s investment portfolio and to the world in which our members will retire, “said Ms. Blakey.
“An urgent response is required and the actions within the CCTP have been carefully and carefully designed to provide an effective and tangible response. “
HESTA started to withdraw from thermal coal in 2014 and has increased its investment screen to the current limit of 15% of revenues.
“Our investments in thermal coal represented a very small percentage of external funding,” said Blakey.
An ambitious goal
Ultimately, HESTA’s investment plans would allow each company it invests to have zero net emissions in three dimensions.
The end result will mean no direct emissions from its operations, no emissions from electricity consumption (as its electricity suppliers are all non-carbon emitters), and no emissions from the supply chains that each company uses to supply parts. and services.
The plan means that HESTA is committed to aligning with the Paris agreement on climate change which aims to keep the temperature increases below 2 degrees and as close to 1.5 degrees as possible.
To achieve this, it is estimated that the world would need to achieve zero net emissions by the middle of the century.
“If efforts to improve the current trajectory of global warming are unsuccessful, then we can expect an increase in the severity and frequency of damage caused by the physical impacts of climate change,” said Blakey.
“There is no doubt that the social, environmental and economic cost of inaction will be much higher than
the cost of responding to climate change. “
Lack of local projects
Currently, HESTA has invested $ 3 in renewable energy abroad for every dollar invested in Australia, but Blakey said that needs to change.
“We would like to invest more in this type of opportunity in Australia.”
“To do this, we need good opportunities in Australia and political certainty to give birth to this innovation,” she said.
While the government has yet to deliver political certainty after years of internal energy and carbon wars, regulators are now calling for action.
“It is really interesting that APRA has been so clear that climate change is a financial risk,” said Blakey.
“They expect these risks to be mitigated and they see them as material, predictable and achievable now,” said Blakey.
The investment objectives will be rolled out over time depending on market developments. Although thermal coal is no longer available, the fund does not plan to sell other fossil assets in the short term.
The new daily belongs to Industry Super Holdings