Australian superannuation fund, Local Government Super (LGS), has achieved number one ranking from 300 of the largest retirement funds surveyed worldwide in the first ever global climate investment index. The Climate Institute’s Asset Owners Disclosure Project (AODP) aims to show how the world’s biggest investors, including superannuation funds, are managing climate risk.
The world’s top-ranked green investors were revealed today following the closure of the Climate Change Conference in Doha, Qatar.
“We’ve been working steadily to build a sustainable portfolio for over 10 years, and we are well recognised as a leader in Australia. To see our initiatives being recognised on a global scale is a real honour, and it is great to see an Australian fund ranking number one in the world in such an important area. Speaking for a Board that has made a massive commitment to securing sustainable results for our members, this recognition is very satisfying,” said LGS CEO, Peter Lambert.
Around $3.3 billion – or just over half – of LGS’s total assets are in responsible investment strategies across Australian and international equities, property, absolute return, private equity and sovereign bonds.
“The holistic approach, in which LGS seeks to invest in line with environmental, social and governance (ESG) principles across all asset classes, not just a few that might be considered ‘easier’, is what sets us apart,” said Mr Lambert.
“This reflects our long-held belief that sustainability must be a key consideration for any organisation pledged to deliver returns to investors over horizons in the order of 40 years or more,” he said. “LGS accepts the science around the human impacts on climate change, particularly through the burning of fossil fuels. Our Sustainable/Socially Responsible Investment policy views climate change as the most significant environmental risk affecting investment returns. It is a complex area, and we are developing strategies that attempt to address these risks and provide strong, long-term returns for our members.”
Mr Lambert went on to point out some key initiatives that have contributed to LGS’s global number one ranking:
- Extensive transparency, disclosure and public reporting on climate change and its impact on LGS’s investments, including carbon footprint analysis
- Significant investments in private and public companies who are developing low carbon and cleaner products and services – an area we see strong growth in the future
- LGS’s flagship ‘green’ direct property portfolio also continues as a prime example of its ESG commitment. With properties having been extensively refurbished with practical energy efficient technologies, the entire portfolio has achieved 47% reduction in energy use since 2009, and is also rated at the highest 6 stars NABERS energy rating
- Specific allocation of up to 15% of the government bonds portfolio in primarily ‘AAA’ rated ‘green’ or ‘climate’ bonds issued by agencies such as the World Bank, European Investment Bank or Asian Development Bank
- Active ownership, with a specific focus on exercising our influence as a shareholder and bondholder to engage and vote on companies where we are concerned with their approach to climate change risk management
- Introduction of Sustainable Australian Shares as one of the Fund’s new single sector investment options, which feature an exclusion on companies involved in coal mining
“LGS is also active in organisations which promote responsible investment, such as United Nations Principles for Responsible Investment (UNPRI) and those that are involved in understanding investment risks of climate change, such as Investor Group on Climate Change (IGCC). LGS has participated in the development of the AODP from its roots as an Australian based survey in 2010, and is proud to see its growth as a global survey. Climate change is a global concern and asset owners such as super funds play a key role to responding to these issues.”
For more information or to arrange an interview with Peter Lambert, please contact:
Kaitlin Walsh Tamera Lang
BlueChip Communication BlueChip Communication
Tel: 02 9018 8600 Tel: 02 9018 8600