HESTA pledges to be net zero by 2050
26 June 2020 at 5:42 pm
The $52 billion industry superannuation fund aims to be a leader in responsible investment
Australian super fund HESTA will reduce absolute carbon emissions in its investment portfolio by 33 per cent over the next decade, as part of a plan to be net zero by 2050.
HESTA’s Climate Change Transition Plan (CCTP) seeks to align the $52 billion fund’s actions and investment portfolio with the Paris Agreement.
CEO Debby Blakey said it was the first major Australian superannuation fund to make carbon reduction commitments of this scale.
“Our [CCTP] is set to be one of the most comprehensive of its kind undertaken by a superannuation fund, mapping out how we’re going to manage climate risk, align our actions to a below-two-degrees world and support the transition to a low-carbon economy,” Blakey said.
“This is an exciting piece of work that reaffirms our ongoing commitment to leadership in responsible investment and can help protect and enhance the long-term performance of our members’ investments, while driving meaningful change and contributing to a healthier planet and society.”
HESTA has committed to introduce carbon reduction targets for its portfolio to manage key financial risks, while also seeking ethical investment opportunities amid the low-carbon transition.
It also said it would pursue real-world economic change “through engaging with material holdings and managers to address medium-term transition risks and opportunities”.
Blakey said the CCTP would underpin investment decision making and be informed by ongoing research and developments in investment practice.
“We are confident the CCTP can position our investment portfolio well into the future to help us achieve our ambitious investment objectives and continue to deliver strong, competitive, long-term returns for HESTA members,” she said.
“We know our members in health and community services care deeply about climate change and that’s why we’re committed to sustained, long-term action to transition our investment portfolio for a low-carbon future.”
HESTA will monitor and report progress against its emissions reduction targets on an annual basis.
The Responsible Investment Association Australasia (RIAA) has welcomed HESTA’s commitment.
CEO Simon O’Connor said the super fund was showing “exemplary leadership“.
“HESTA’s announcement reflects the increasing momentum within financial services companies in Australia for insurers, banks and super funds commit to aligning their business with the Paris Agreement,” O’Connor said.
“We hope other large Australian super funds committed to responsible investment will swiftly follow suit.”
O’Connor said that RIAA’s Super Fund Benchmark Report 2019 showed that while more super fund boards were considering climate risk, climate-related financial disclosures were relatively rare.
He praised HESTA for taking the lead on climate action.
“Increasingly we are seeing super funds step up to play an important role in delivering on critical agreements like the Paris Agreement in a manner that is aligned with their member expectations and is consistent with the direction our regulators are heading in regarding climate risk guidance,” he said.