A climate of change: introducing UniSuper’s climate change investment reporting

We welcome global guidance for companies to disclose climate change-related risks and launch our first climate risk disclosure report.


Spotlight on reporting

In 2017, the G20’s Taskforce on Climate Related Financial Disclosures (TCFD) released a voluntary climate risk reporting framework.

The TCFD, headed by Michael Bloomberg, is now leading the way to advance consistent climate-related financial risk disclosure.

“Climate change isn’t only an environmental problem, but a business problem as well,” Bloomberg says.

“Investors are asking questions about how well organisations are identifying and managing risks and opportunities in the transition to a lower-carbon economy.”

The TCFD disclosure framework is endorsed by a number of organisations, including the Investor Group on Climate Change, Climate Action 100+, the Principles for Responsible Investment, and the Australian Council of Superannuation Investors—in all of which we’re an active member.

Talieh Williams, Manager of Governance and Sustainable Investments for UniSuper, says UniSuper’s ESG team is seeing an increasing number of companies report on climate-related risks in line with the TCFD framework.

“We also continue to proactively engage the companies in which we invest to encourage greater transparency about climate risk management,” Talieh says.

Our climate change risk reporting

We’re pleased to have recently released our first Climate Risk Disclosures Report. Prepared in accordance with TFCD recommendations, it’s one of the first reports of its kind by an Australian super fund.

It outlines the ways in which we seek to monitor, assess and manage investment-related climate risk.

“Our members are some of the most knowledgeable and engaged when it comes to climate and environmental matters,” Talieh says.

“We’ve always provided detailed responses to member queries about climate risk management, and this report brings key information together in one document.”

We also publish our half-yearly Responsible Investment Report, as well as a range of other documents including our Climate Change Position Statement.

Our climate risk assessment

Since 2008, we’ve regularly assessed the impacts of climate change to our investments.

“We assess our portfolio against emissions and carbon foot-print intensity levels, fossil fuel exposure, and physical and geographical risks, among other measures” Talieh says.

Our findings conclude that our exposure to the most carbon-intensive companies is considerably lower than the part these companies make up of Australian and international share markets.”

Chart showing UniSuper's sustainable options (16%), Defined Benefit Division (38%), Balanced option (88% of the benchmark)

We regularly review the carbon intensity of our options. .Analysis has consistently shown that based on the information available, our portfolios have a lower carbon intensity than the global industry standard benchmark (MSCI All Country World).

Based on equity holdings as at 31 January 2018. Coverage represents 70% of the Balanced options holdings, 82% of the DBD, 85% of the Sustainable options and 74% of the MSCI All Country World Index.
For more information about our analysis, refer to our Climate Risk Disclosures Report.

Talieh and Senior Investment Analyst, Sybil Dixon, will appear in the February edition of our Super Informed Radio podcast to debrief the Australian general meeting season and focus on key governance matters.

Learn more about UniSuper’s approach to responsible investing.