CBUS SUPER, Australia’s leading building and construction industry superfund, will target an ambitious 45 percent reduction in their absolute portfolio emissions by 2030 according to a new Climate Change Roadmap launched today, in line with the prevailing science.
Cbus Super has also locked in a commitment to achieve net zero emissions by 2050, reinforcing its commitment to the Paris Agreement.
The Intergovernmental Panel on Climate Change (IPCC) released a Special Report in 2018 suggesting deep emissions reduction is required globally by 2030. An estimated 45 percent carbon reduction from 2010 levels is needed to have any chance of limiting warming to 1.5 degrees.
Cbus Super CIO Kristian Fok, said the second iteration of the biannual roadmap charts a clear course for our ongoing work in reducing emissions and safeguarding members savings from climate related risks.
“Cbus Climate Change Roadmap represents a strong and sure determination to see our members retire securely in a safe climate,” Mr Fok said.
“The average Cbus member is 39 years old. It’s our responsibility to safeguard their investments as the financial impacts and physical effects of climate change intensify.
“This science has made clear the targets and timeframes. The course that we have charted will see Cbus reduce our portfolio emissions while investing further in renewable energy and climate solutions, as well as avoiding ‘stranded assets’ as the economy transitions.”
Mr Fok said a focus on a green recovery was important for workers as the global economy seeks to recover from the Covid-19 pandemic.
“Recent events are a demonstration of the importance of resilient communities anchored around decent and secure jobs,” Mr Fok said.
“The climate solutions we invest in should strengthen community resilience. Every investor has to be mindful to the risks of leaving communities behind.”
STRANDED ASSETS
Cbus has already undertaken significant work to understand companies that are at risk of not transitioning either due to products they produce or lack of management capability.
Under the roadmap Cbus will develop a stranded assets framework, building on work that has already seen several high-risk climate holdings reduced or being removed from their portfolio.
“The economy of 2030, let alone the economy of 2050 is going to look very different from what we have experienced over the last few decades," Mr Fok said.
“That poses risks for long-term investors like Cbus. There are assets that simply won’t see out their traditional economic life.
"By identifying the carbon emissions of companies and assets that we hold, Cbus is able to help reduce emissions in the real economy and avoid assets that will increasingly become stranded as the economy transitions.
“We have been doing a significant amount of work to determine those assets that aren’t able to transition to a net zero environment, and this work will ramp up under our new road map.
PORTFOLIO ASSETS
Under Cbus’ new roadmap, pathways to achieve this portfolio targets will be developed for each assets class, including equities.
“Cbus already has specific net zero emissions targets for property (by 2030) and infrastructure (2050) and we are working with our investment managers to make sure that everyone is on the right pathway,” Mr Fok said.
“Portfolio wide targets gives us more flexibility as to how we allocate our members money. This next two-year road map will see climate pathways developed across sectors and asset classes, acknowledging the economy will decarbonise at different rates. This approach also provides consistency with what we ask of companies and assets in which we invest."
STRONG PROGRESS SO FAR
Mr Fok said Cbus had already made significant progress to reduce emissions across the portfolio.
“Cbus Property consistently ranks at the top of the international GRESB ratings, ranking second in 2019 and third in 2018,” he said.
“We are implementing stranded asset constraints across our internal quantitative portfolios.
“We are deploying our 1 percent climate opportunities investments and our landmark Bright Energy Investments partnership is building some of Australia’s best renewables assets.”
ADVOCACY
To assist the global economic transition Cbus has joined the United Nations Convened Net Zero Asset Owners Alliance and is the first Australian financial institution to do so. The global initiative is convened by the PRI and UNEP Finance Initiative and is supported by global leading asset owners committed to transitioning their portfolios to net zero emissions by 2050.
“Cbus recognises that to decarbonise the global economy in line with the Paris Agreement requires collective action,” Mr Fok said.
“Members of the Asset Owners Alliance has over $4 trillion in collective assets under management.
“Cbus is determined to play our part in these global advocacy efforts.”
The Cbus Climate Position Statement and Roadmap will be reviewed next in 2022 and is publicly reported on each year in the Cbus Annual Integrated Report.
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