A sustainable path to 2050

Investments

Info for members

14 Sep 2020

3 min read

UniSuper is committed to achieving net zero absolute carbon emissions in our investment portfolio by 2050, in alignment with the Paris Agreement.

As Australia’s fund for the higher education sector, aligning with the Paris Agreement reinforces our long-held commitment to incorporate environmental, social and governance (ESG) factors into all investment decisions.

UniSuper is Australia's largest investor in ESG-themed strategies, with more than $10 billion in funds under management across these options. We have more than a decade of experience in responsible investment and we continue to build on our approach to managing climate risks.

In line with our status as a leading fund, we aim to be at the forefront of the transition to a low-carbon world. We recently published our updated climate change position statement.

How we manage climate risk in our investments

1. Portfolio construction - factoring decarbonisation as a core investment theme in all our portfolios

Applying a shadow carbon price to material investments that we expect to hold for the medium to long term
Excluding companies that generate greater than 10% of their revenues from thermal coal mining

2. Company engagement - working with the companies that we invest in to encourage rapid decarbonisation of their operations and supply chains

Seeking Paris-aligned emission reduction targets and strategies with 100% of our portfolio* companies at management and board levels

Despite COVID-19, our Investments team have discussed climate change in more than 164 meetings with companies in 2020. As a result of our (and other investors’) ongoing engagement with companies in our portfolio, 80% have set emission targets, compared to just 45% in 2018. Importantly, as at 2020, over 50% of our investments have set either net-zero or a Science Based Target imitative endorsed target (SBTi), up from 26% in 2019.

3. Collaboration - working with service providers, investor groups and climate advocacy initiatives

Service providers: we will be partnering with our Custodian, BNP Paribas, to develop climate-reporting to helps us and other asset managers and report on climate exposures in their portfolios
Investor groups: we work with the Australian Council of Superannuation Investors (ACSI), the Investor Group on Climate Change (IGCC) and Responsible Investment Association Australasia (RIAA) to drive research, advocacy and engagement with other Australian institutional investors
Climate advocacy initiatives:
- A lead investor and early signatory with Climate Action 100+, an investor-led initiative specifically targeting engagement with the top 100 greenhouse gas emitters in the world
- Partnered with Climate League 2030, an initiative that brings together investors with the common goal of reducing Australia’s emissions by 45% by 2030.
- UniSuper supports the proposed The Climate Change (Adaptation and Mitigation) Bill 2020 and we believe it is a sensible national response to the challenge of climate change. You can read our submission letters:
  - Submission letter to Members of Parliament (PDF, 128KB)
  - Submission letter to the Committee Secretariat (PDF, 270KB)

ClimateWorks, an independent, not-for-profit body, assessing business momentum towards net-zero emissions across Australia released a report on the superannuation sector. UniSuper was recognised as one of only three super funds to be fully aligned with the goal of net zero emissions by 2050, a key element of the Paris Agreement.

Short and medium-term targets to support our longer-term objectives

In working towards 2050, we've also set short and medium-term targets that support our longer-term objectives.

Timeframe	Target	Progress to date (as reported in our latest climate risk report)
2021	100% of portfolio¹ companies to have Paris-aligned operational commitments by the end of 2021.	34/50 portfolio companies have Paris-aligned operational commitments
2030	Contribute to a 45% reduction in Australia’s emissions. UniSuper will target an absolute reduction in emissions at a portfolio level by 2030 where practical (with net-zero unlisted property and infrastructure portfolios by 2030). Allocating capital to companies needed to achieve the ultimate goal of net zero	100% of unlisted property portfolios with net-zero targets 5% of UniSuper’s FUM in invested in green themes
Building to 2050	At a whole-of-fund and portfolio level, achieve net-zero absolute carbon emissions. By this time, UniSuper assumes there will be the necessary breadth of companies and sectors operating at net-zero to enable construction of sufficiently diversified portfolios.

Timeframe

Target

Progress to date (as reported in our latest climate risk report)

2021

100% of portfolio¹ companies to have Paris-aligned operational commitments by the end of 2021.

34/50 portfolio companies have Paris-aligned operational commitments

2030

Contribute to a 45% reduction in Australia’s emissions.

UniSuper will target an absolute reduction in emissions at a portfolio level by 2030 where practical (with net-zero unlisted property and infrastructure portfolios by 2030).
Allocating capital to companies needed to achieve the ultimate goal of net zero

100% of unlisted property portfolios with net-zero targets
5% of UniSuper’s FUM in invested in green themes

Building to 2050

At a whole-of-fund and portfolio level, achieve net-zero absolute carbon emissions.

By this time, UniSuper assumes there will be the necessary breadth of companies and sectors operating at net-zero to enable construction of sufficiently diversified portfolios.

¹ material, active, in-house Australian investments

Member choice – offering members investment options

As Australia's largest investor in ESG-themed strategies, we offer our members three investment options designed to avoid companies involved in the production, generation, or transmission of coal, oil or gas:

Global Environmental Opportunities – introduced in 2012
Sustainable Balanced – introduced in 2007
Sustainable High Growth – introduced in 2000