{"id":120137,"date":"2021-08-19T19:19:29","date_gmt":"2021-08-19T19:19:29","guid":{"rendered":"https:\/\/fin2me.com\/?p=120137"},"modified":"2021-08-19T19:19:29","modified_gmt":"2021-08-19T19:19:29","slug":"disappointing-unisuper-threatens-to-divest-csl-over-climate-targets","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/disappointing-unisuper-threatens-to-divest-csl-over-climate-targets\/","title":{"rendered":"\u2018Disappointing\u2019: Unisuper threatens to divest CSL over climate targets"},"content":{"rendered":"
The $100 billion superannuation fund for the country\u2019s university sector has threatened to divest holdings in biotech giant CSL if it does not set a net zero emissions target, as part of its policy to decarbonise its entire investment portfolio.<\/p>\n
In a climate report released on Thursday, Unisuper disclosed it had halved its exposure to the fossil fuel sector over the previous financial year and fully divested from companies that make more than 10 per cent of revenue from thermal coal.<\/p>\n
But the fund also singled out three ASX-listed companies \u2014 COVID-19 vaccine producer CSL, gamer Aristocrat and logistics company Qube \u2014 that were at risk of being abandoned if decarbonisation targets were not set.<\/p>\n
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Unisuper says CSL\u2019s approach to cliamte change has been \u2018disappointing\u2019. <\/span>Credit:<\/span>Eddie Jim<\/cite><\/p>\n \u201cWhile most of these companies aren\u2019t high emitters and have clear pathways to decarbonisation, it\u2019s disappointing they have been slow in their adoption of emission reduction targets,\u201d the report said.<\/p>\n The fund, which has more than 450,000 members, pledged to continue engagement but threatened to protest remuneration reports or fully divest, \u201cespecially where a lack of action represents a material risk to us and there is no viable decarbonisation pathway\u201d.<\/p>\n In his annual remarks filed with the ASX on Wednesday, CSL chair Brian McNamee said the company was working on setting \u201cenvironment, social and sustainable\u201d targets within the next two years.<\/p>\n Qube spokesman Paul White said the company had engaged an independent expert last financial year to identify appropriate methods to reduce carbon emissions and \u201cadopt realistic targets\u201d.<\/p>\n An Aristocrat spokeswoman said the company maintains \u201cactive dialogue with Unisuper\u201d and \u201cvalue their expertise and input\u201d, adding the company was \u201con a journey\u201d with respect to greenhouse gas emissions and would consider \u201cpotential commitments as soon as possible\u201d.<\/p>\n Unisuper launched a revamped climate policy last September which commits to having net-zero carbon emissions across its investment portfolio by 2050. The plan included a series of interim targets, including ensuring all companies the fund is invested in have Paris-aligned targets by the end of this year.<\/p>\n \u201cWe\u2019ll then shift our focus to supporting the adoption and delivery of robust 2030 decarbonisation targets for business operations and value chains,\u201d Unisuper\u2019s latest report said.<\/p>\n Market Forces director Will van de Pol said there was a \u201cvery small portion\u201d of ASX-listed companies that had meaningful decarbonisation plans and called on Unisuper to escalate engagement tactics with all companies. \u201cThe vast majority of ASX-listed companies can and must be part of the transition,\u201d Mr van de Pol said. \u201cSo engagement is an appropriate strategy for the majority, but it needs to come with clearer expectations, milestones that need to be met and where they\u2019re not being met the ultimate sanction is divestment.\u201d<\/p>\n Unisuper reported its total exposure to fossil fuels had reduced from about 5 per cent to 2.5 per cent of all investments over the previous financial year, which included selling down stakes in Australian oil and gas giants Oil Search, Santos and Woodside. The fund\u2019s remaining investments in the fossil fuel sector are largely in gas pipelines but stakes in North American pipelines Enbridge and TC Energy had also been reduced, according to the report.<\/p>\n \u201dThese were largely held in the [defined benefit fund] because they had reliable cash flows, dividends and predictable growth profiles,\u201d the report claims. \u201cHowever, the threat from decarbonisation is increasing and they do not have an obvious pathway to Paris alignment.\u201c<\/p>\n Mr van de Pol called on Unisuper to formalise investment exclusions for the oil and gas sector. \u201cThere\u2019s no commitment to suggest this is necessarily a one-way street. So we\u2019d really like confirmation from the fund that it won\u2019t be reinvesting members\u2019 money in these companies and will continue to reduce all fossil fuel investments,\u201d he said.<\/p>\n One Unisuper insider, who could not be named because they were discussing sensitive information, said it was \u201cunlikely\u201d the fund would actively make new investments in oil and gas. \u201cIf you look longer term, we\u2019re not optimistic about the future.\u201d<\/p>\n Former Climate Commissioner Professor Lesley Hughes, who has authored previous reports for the Intergovernmental Panel on Climate Change (IPCC), said Unisuper\u2019s trajectory was pleasing but faster action was needed. \u201cThey\u2019re certainly heading in the right direction, which is great news, but they still have a way to go.\u201d<\/p>\n Professor Hughes, who is a Unisuper member, said the latest IPCC report warned global temperatures could be stabilised \u201cif we make deep and rapid emissions reductions now\u201d without which, the consequences will be dire.<\/p>\n \u201cRight now, at 1.2 degrees warming, we\u2019re already seeing longer, hotter, more severe heatwaves and drought in Australia, stronger and more severe cyclones, bleaching of the Great Barrier Reef three times in five years. It\u2019s almost unimaginable what life on this planet could be at more than 2 degrees warming.\u201c<\/p>\n The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. <\/i><\/b>Sign up to get it every weekday morning<\/i><\/b>.<\/i><\/b><\/p>\nMost Viewed in Business<\/h2>\n
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