Climate-proof your super

IEU member Brooke Thompson puts the case for clean, green investing.

Superannuation is perhaps our most substantial asset, and it is vital to our future wellbeing. But have we considered whether our super investments are good for the climate?

Many super funds are shifting out of fossil fuels for ethical reasons. With stronger commitments to transition to low-carbon economies in the United States, Europe and Asia, it is prudent to consider how our super is invested. Stock analysts highlight the economics of going green.

Is our super invested in companies that align with our moral obligations to keep the impact of climate change below two percent? How are we to know whether our super is invested in companies that are undermining the Paris Agreement on climate change?

Climate campaigner Market Forces has tabulated all super funds and their investments.

Does your super fund disclose the companies in which it invests? It is best practice for funds to do so. If it’s not clear, contact your fund and ask directly.

A recent groundbreaking court case, McVeigh v REST (Retail Employees Superannuation Trust), sets a new minimum standard of climate action for all super funds in Australia. In this case, a member accused the fund of failing to act in his best interests by not properly considering the risks the climate crisis poses to investments.

The fund conceded “climate change is a material, direct and current financial risk to the superannuation fund” and agreed to: target net zero portfolio emissions by 2050; disclose all investments; and identify, quantify and manage climate risks, having regard to the Paris Agreement.

Ask your fund to outline its strategy to reduce climate risk by divesting from companies that are undermining the Paris climate goals.

Alternatively, the Responsible Returns website lists environmental, social and governance (ESG) superfunds that enable you to select the criteria most important to you.

NGS Super responds

NGS CEO Laura Wright told Newsmonth the fund’s recently announced target of a carbon-neutral portfolio by 2030 is the natural next step in its integration of ESG [environmental, social, governance] and responsible investing principles.

“We know it’s an ambitious target, but we believe that we need to take real action, in a timeframe that aligns with scientific advice on climate change,” Wright said.

“Our members working in schools have a strong commitment to the future. We know our members are very concerned about these issues, and we’ve responded accordingly, because we believe that investing sustainably and for good will improve returns to members. It’s better to be investing money to make the world a better place if you can.”