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 median growth fund delivered 1.9 per cent in March, adding to the “stunning” rally that has seen super funds gain 11 per cent since November.
Vanguard has affirmed its support for the current super performance test, emphasising the importance of keeping the process straightforward.
While some superannuation funds have gone down the route of internalisation, others say they favour ‘smart partnering’ with external managers for diversification appeal.
Michael Lovett, who left the investment firm just three months after launching its Vanguard Super offering, has taken up a chief executive role at an Australian asset manager.
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