Vision Super moves to low carbon benchmarks


By Wouter Klijn

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Vision Super has changed its investment benchmarks for its passive international and Australian share portfolios to low carbon benchmarks, in order to reflect its position on climate change as an investment risk.

“Our first obligation is to deliver good returns to our members, and indeed, we are bound by law to do so,” the fund said in a newsletter to members.

“But Vision Super also recognises that climate change is an existential threat and one that poses one of the greatest environmental risks to our investment portfolio.

“Vision Super’s investment philosophy – enshrined in our environmental social and governance (ESG) policy – commits us to supporting a global transition to a low carbon economy,” it said.

Vision Super has moved its international shares portfolio to the global MSCI Low Carbon Index, which means the fund now invest in overseas companies that have a 70 per cent lower carbon exposure than the rest of the market.

Vision Super has also moved its Australian shares portfolio to the IFM Low Carbon Australian Shares fund, which reduces its exposure to Australian companies with a high carbon risk.

“Vision Super's index allocations in Australian and international shares represent more than 45 per cent of our investments in shares,” the fund said.

“For the rest of our shares allocations, our managers are required to take into account ESG principles in their company evaluations.

“We specifically ask our managers to include in such evaluations a reasonable estimate of the impact of phasing out fossil fuel usage consistent with limiting global warming to no more than 2 degrees centigrade above pre-industrial global mean temperature,” the fund said.

The super fund has also taken additional measures to combat carbon emissions, including the acquisition of a wind farm in Victoria, which provides energy to 7,000 households.

“We are also a long-term investor in the biggest infrastructure fund in Australia with significant investment in wind, hydro and solar power plants,” the fund said.

Vision Super said it welcomed the renewed global focus on emission reductions as a result of the 2015 Paris Climate Summit.

The fund recently signed up to the Paris Pledge for Action – an initiative aligned with the 2015 UN Climate Talks in Paris encouraging all organisations, businesses, regions, cities, and investors to strive for a 50 per cent carbon emission reduction by 2030.

It aims to be carbon neutral by 2050.

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