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In 2021, Qantas Super announced our ambition of achieving net zero carbon emissions across our investment portfolio by 2050.

We believe that climate change can influence investment risks and returns, and that a sustainable approach to investing will positively contribute to delivering long-term investment outcomes that best meet the retirement needs of members.

We are continually looking at the best ways to reach our ambition and we may occasionally make changes to ensure we are on the right track.

Updating our interim target

It’s a long way to 2050, so Qantas Super’s net zero journey has been broken down into three phases. In Phase 1, we originally expressed our aim to achieve a 24 percent reduction in carbon emissions from a 30 June 2020 baseline by 2025.

While we are on track to meet this interim target, having achieved a 20 per cent reduction to date, we are now updating this target to bring Qantas Super in line with evolving Australian Government and peer commitments.

We’re updating this target in two ways.

Firstly, we are changing our interim target milestone from 2025 to 2030.

In 2022, the Government passed Australia’s Climate Change Act, which legislated a target of 43% emissions reduction by 2030 (against a 2005 baseline) and the goal of reaching net zero emissions by 2050.

As 2030 is a key milestone both nationally and globally on the pathway to net zero, we are aligning our interim target milestone from 2025 to 2030 for consistency in tracking and reporting.

We will also be changing the metric we use for our interim target.

When we first embarked on this journey, a measure called Weighted Average Carbon Intensity (WACI) was the industry’s preferred carbon metric. WACI measures tons of carbon emissions per million dollars of revenue.

Today, our research shows the dominant metric used by super funds is Financed Emissions Intensity, which measures tons of carbon emissions per million dollars invested. In 2023 we expanded the coverage and methodology of our annual carbon assessment, providing us with a more complete picture of Financed Emissions Intensity across our portfolio and enabling us to set a corresponding target.

We will still track WACI, along with absolute emissions, however Qantas Super is now targeting a 45% reduction in Financed Emissions Intensity (Scope 1 and 2) across our investment portfolio by 2030, from a 30 June 2023 baseline. This will help ensure we can more easily measure and compare Qantas Super’s progress against that of the broader industry.

What are Scope 1 and Scope 2 emissions?

When it comes to measuring a company’s carbon emissions, there are a couple of different categories to look at.

Scope 1 emissions cover the greenhouse gas emissions that a company generates directly – for example, the emissions from a delivery company’s vehicles.

Scope 2 emissions, meanwhile, are indirect emissions produced on the company’s behalf, associated with the purchase of energy – for example, the emissions produced to heat and cool its office buildings.

Scope 3 are all the other emissions a company is indirectly responsible for, up and down its value chain, for example associated with the products it buys from suppliers. We do track the Scope 3 emissions of our holdings, but data availability and quality are not yet at a point where we can set a meaningful target.

 

Our work so far

Our Investment team has made progress over the last three years towards our net zero ambition.

1. Invested $2.6 billion (as at March 2024) in Sustainable Listed Equities

Qantas Super has already achieved a 50% reduction in the Financed Emissions Intensity of our Australian and global listed equities portfolio from 2020-2023. Qantas Super’s current Sustainable Listed Equities partners are Calvert Research and Management, Goldman Sachs Asset Management, Acadian Asset Management, and Parametric Portfolio Associates.

2. Switched to Sustainability Proxy Voting Guidelines

In 2023 Qantas Super appointed ISS as our proxy advisor. ISS votes on our behalf at company Annual General Meetings in line with their Sustainability Proxy Voting Guidelines, which include climate change considerations.

3. Invested in low carbon and climate solutions

Qantas Super has made a number of private markets investments that support the broader economic transition to net zero, including renewable energy and electrification solutions, e-waste recycling for green metals extraction, and sustainable and regenerative agriculture.

 

4. Updated our Negative Exclusion Guideline

In support of our net zero ambition, Qantas Super now prohibits investments in companies that derive more than 20 per cent of their revenue from the mining of thermal coal and its sale to external parties.

5. Added a Head of Sustainability and Impact to our team

Katharine Walters, the former Chief Impact Officer at private equity fund Liverpool Partners and profit-for-purpose fund Inspire Impact, joined Qantas Super in November 2023 as our Head of Sustainability and Impact. This dedicated role was created in May 2023 and Katharine succeeds Allan Chen who is now Head of Private Markets.

Katharine is an experienced ESG and impact practitioner, with 20 years of practical experience in corporate sustainability and responsible investing. Katharine’s areas of expertise include sustainability strategy, assessment, reporting and assurance, with a particular focus on impact investing.

In this role, Katharine is responsible for implementing Qantas Super’s Sustainability Roadmap and pathway to net zero, along with other aspects of ESG and impact integration.

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