Eco Investor June 2015


Australian Super Funds Still Lead on Carbon

Australia's Local Government Super fund ranked number one in the world index for pro- actively managing climate risk, says the annual Asset Owners Disclosure Project (AODP), an independent not-for-profit global organization that aims to protect the investments held by the world's largest asset owners - such as pension funds, insurance companies, sovereign wealth funds, foundations and endowments – from the risks of climate change.

As a country, Australia ranked second behind Norway for the way its super funds in the AODP manage climate risk.

Other Australian super funds that ranked highly were Australian Super at number seven, First State Super at number 13, VicSuper at 15, and CareSuper at 17.

Local Government Super and Australian Super were both ranked AAA, while the other three were AA.

The AODP's 2015 Global Climate 500 Index uses data supplied by the world's 500 largest asset owners. These are invited to respond to the survey and a research team also uses publicly available information. The ratings methodology looks at five main aspects of an asset owner's climate change performance: 1. Transparency, 2. Risk Management, 3. Low Carbon Investment, 4. Active Ownership, and 5. Incentive Chain Alignment.

The AODP said that key developments over the past year on climate risk communication include: regular announcements by asset owners on carbon-risk management; a proliferation of low-carbon investment initiatives; greater acknowledgement of asset owners' role in climate action by politicians and economic agencies; and greater commitments and some action by leading asset owners.

However, only 7 per cent of assets owners were able to calculate their emissions. Only 1.4 per cent reduced their carbon intensity from the previous year. Only 2 per cent have an emissions intensity reduction target for next year. And the gap between climate risk management leaders and laggards is widening, said AODP.

So there is room for improvement.





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