Today’s announcement includes an ambitious milestone of a 45% reduction in direct* CO2e portfolio emissions intensity by 2030
13 December 2021, Sydney: 102-year-old State Super, one of Australia’s largest superannuation schemes with $43 billion in assets, today announced its net-zero CO2e goal across its investment portfolio, in its Pooled Fund, by 2050.
Furthermore, under the Board-approved plan, formulated with input from TCorp (NSW Treasury Corporation) and Mercer, State Super will also set a milestone of a 45% reduction in the weighted-average intensity of CO2e emissions by 2030 by revenue against an end of calendar 2020 baseline, on the way to the 2050 net-zero objective.
The targets were determined with regard to the goals of the Paris Agreement, and were approved by the Board after consideration of environmental, legal and investment factors.
As part of the robust process, a CO2e emissions baseline for the Pooled Fund as at 31 December 2020 was established with the assistance of Mercer. State Super intends to adjust the portfolio over time to ensure its emissions decline progressively in line with the agreed targets. In doing so, State Super is prioritising its pathway for emissions reduction to 2030.
As the majority of baseline emissions are represented in the listed equities portfolio, efforts will be focused on driving further emissions reductions in this portfolio while also progressing decarbonisation of its alternatives and real assets. State Super will work closely with its Master Investment Manager and its fund managers and continue strong engagement with the companies and managers of the assets we hold. In addition, the trustee will continue to evolve and refine its longer-term strategy, including via insights revealed with the continuing improvement of market data.
State Super’s Chair, Nicholas Johnson, said, “As outlined by the world’s leaders and scientists at the COP26 climate summit in Glasgow, the risks arising from climate change are ever-increasing. Indeed, it is now widely recognised that climate change is more than just an environmental or ethical issue; it presents unprecedented financial risks.
“It has become abundantly clear therefore, that in acting in the best financial interests of members, superannuation trustees must respond to the investment risks associated with climate change and seek to mitigate them. It is equally important for them to realise investment opportunities that will come from the transition to a low-carbon economy, including from new technologies, initiatives and policies over short-, medium- and long-term investment horizons,” said Mr Johnson.
In underscoring the case for the adoption of the net zero objective, State Super’s Chief Executive Officer, John Livanas, said, “We have undertaken a significant program of work to ensure the climate change risk management strategy announced today, and the net zero objective for State Super's investment portfolio, are aligned with the best interests of our members and their risk-adjusted returns.
“Importantly, many of our members have actively engaged with us about their expectations for climate change risk to be effectively managed. We understand and appreciate their views. In addition, science experts and data from the Intergovernmental Panel on Climate Change also show it makes the best financial sense to act now.
“We will update our Board and State Super members regularly on the decarbonisation of our investment portfolio,” he said.
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Note - reference to CO2e emissions. Please note, the use of the term “CO2e” throughout this news release has been used as a short-hand term for greenhouse gases, which include, for example, carbon dioxide, nitrous oxide and methane.
For more information, please refer to STC Fact Sheet 18: State Super’s 2050 Net-Zero Greenhouse Gas Emissions Plan.