Committed to your retirement and the environment

As one of the globe's defining challenges, climate change is an area where global reach and engagement are paramount and in 2018 we signed on to Climate Action 100+. This is a 5-year investor-led initiative to ensure the world’s largest corporate greenhouse gas (GHG) emitters take critical action to align with the goals of the Paris Agreement.

What is Climate Action 100+?

Launched in 2017, Climate Action 100+ matches investors with 161 ‘focus companies’ considered to be prominent greenhouse gas emitters; accounting for two-thirds of annual global industrial emissions and over 80% of corporate GHG emissions. These companies are critical to the decarbonisation of investment portfolios and the global economy.

Climate Action 100+ has over 370 investor signatories from around the world representing over $35 trillion in assets under management, signing on in support to help drive change. There are currently 31 Australian signatories including UniSuper, and 13 Australian focus companies including Rio Tinto, AGL Energy, Qantas, Boral and Bluescope Steel.

It gives us opportunities for smaller investors

As an Australian investor (with relatively small investments in the company), it would have been difficult for us to initiate climate change discussions with PetroChina, the second largest Chinese oil producer. Following on from consultations between Climate Action 100+, PetroChina has now improved reporting and made short and long term climate-related commitments. Importantly, it’s setting an example for other Chinese companies and holds the doors open for further discussions and greater success.

Local engagement with investors, who can speak the language and understand the cultural nuances of the region, is very powerful.

More companies betting on green

United Nations Secretary General, Antonio Guterres, believes companies are ‘betting on green because they understand it’s the path to prosperity and peace on a healthy planet. However, despite some strong achievements, most companies have a long way to go to fully meet the expectations of the initiative, framed around climate governance, action and disclosure.

In 2019, the initiative’s first progress report showed some breakthrough commitments from companies in traditionally challenging sectors. Some key outcomes led by the investor signatories to Climate Action 100+ include:

• Maersk, the world’s biggest shipping company, committed to net zero emissions by 2050.
• Glencore, the world’s largest exporter of thermal coal, agreed to cap coal production to current levels of about 145 million tonnes per year.
• Royal Dutch Shell, one of the world’s oil and gas supermajors, released a joint statement committing to a range of industry leading climate commitments, including emissions reduction targets that include scope 3 emissions.
• BHP, one of the world largest miners, committed to assessing and working with customers to limit scope 3 emissions.

In addition to this, several companies in Australia, including Bluescope Steel, Rio Tinto and Origin Energy, have set ambitious targets and improved their climate-related financial disclosures, helping investors better understand their climate-related risks.

What’s next for Climate Action 100+?

As a responsible investor, we’ll always endeavour to address global environmental challenges. Climate Action 100+ has allowed us to be involved in a global movement, opening up conversations with companies that might not meet with a single investor. For companies engaged by Climate Action 100+, having a set of clearly defined tasks keeps the conversations focused on what’s possible (although ambitious) and relevant for that particular company.

Stephanie Maier, Director of Responsible Investment, HSBC Global Asset Management and steering committee member of Climate Action 100+ says “we’re now at a tipping point where a significant number of companies have made bold commitments to achieve net zero emissions, with others following suit”.

At UniSuper, we want to help build on this momentum by encouraging all companies, not just those targeted by Climate Action 100+, to set ambitious targets to reduce emissions and leave a positive footprint on the planet.

For more information, read about our commitment to understanding and monitoring climate risks across our investments.