We believe that environmental, social and governance factors (ESG) can impact investment risks, returns and reputation. In order to help protect your super from these risks our approach to investing takes into consideration ESG factors as set out in our Investment Guide.
Part of this belief is acknowledging climate change as one of the major challenges of our time and that it creates investment risks. Adapting to climate change will see technological and regulatory change, and have physical and social impacts. It will also lead to new investment opportunities such as renewable energy. Investment performance may also be affected by climate change to varying degrees, depending on the company, sectors, regions, and asset class of the investment.
Qantas Super has a number of processes to assess the risks and opportunities of climate change.
One way is through our membership with the Australian Council of Superannuation Investors (ACSI), who work with large investors to influence and engage with companies on ESG issues. Climate change is one of the top ESG issues ACSI engages companies on – as they seek better management and disclosure of risks and opportunities, including reporting against the Task Force on Climate-Related Financial Disclosures (TCFD) framework.
ACSI also undertakes public policy advocacy aimed at improving legislative and regulatory frameworks related to climate change.
As well as being a member of ACSI, we measure and monitor the carbon emissions profile of our listed equities portfolio on a semi-annually basis. While we do not currently have a fixed view as to how the carbon emissions profile will be used, we measure it so that we can monitor the risk and consider whether it has any financial impact on our investments. The carbon emissions profile is measured semi-annually and is sourced from MSCI on a security level basis (and where a security is not measured by MSCI then it is removed from the calculation and the portfolio is re-weighted pro-rata so that all remaining security weights sum to 100%).
Climate change has created a wide range of investment opportunities in the renewable energy sector. We will continue to recognise those opportunities and hold climate-friendly investments such as wind and solar energy, green star rated properties and other sectors dedicated to reducing carbon emissions that we believe will allow us to achieve our return objectives. Some examples of the climate-friendly investment’s we’ve made on behalf of members include renewable energy assets in Australia and Asia, as well as in timberland forestry assets in Australia and New Zealand.