Australian funds highlighted for climate action plans

Three Australia investors have been singled out for showing best practice in setting climate action plans.

Aware Super, IFM Investors and UniSuper are part of a list of 10 institutional investors highlighted by the Investor Agenda for their work on climate risk.

The Investor Agenda is comprised of seven investor groups - the Asia Investor Group on Climate Change (AIGCC), CDP, Ceres, Investor Group on Climate Change (IGCC), Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative.

"I think the common thread to these case studies is showing leadership and transparency to the journey that investors are in the integration of climate in the portfolio," said IGCC and AIGCC CEO Rebecca Mikula-Wright. "It's really important to highlight what investors are doing and to show measurable progress in real-world emissions reductions profiles."

The case studies are designed to highlight how the features fund managers and asset owners' climate action plans are aligned with some or all of the actions outlined in the Investor Agenda's ICAPs Expectations Ladder, which was released in May 2021.

The framework sets out clear expectations for investor climate action plans (ICAPs), including steps for investors to deliver on their climate commitments and support the global goal of a net zero emissions economy by 2050 or sooner. The ladder calls for actions within the four areas - investment, corporate engagement, policy advocacy, and investor disclosure, with governance as a cross-cutting theme across all areas.

"You can see there are different approaches by different funds, and it goes to the different types of actions that they have identified," Mikula-Wright said. "IFM is interesting because of the infrastructure focus, which gives a clear lens into that asset class at a detailed level.

"What they have outlined is this transparency - they identify what they have done and what they haven't done and what they're planning to do, as well as getting comfortable with saying we haven't done it all yet."

Aware Super's case study highlights the fund's approach to their climate action plan, which has strong buy-in across the organisation, Mikula-Wright said.

"With Aware Super, you can see how that buy-in across the organisation has been key to their internal policy and how their transition plan is playing out. It's really clear how the plan is moving across the organisation, and you get a sense of the buy-0in and the strength of the transition plan."

UniSuper's case study elaborates on the fund's use of the ICAP framework and Science Based Target Initiative (SBTi) methodology to set future short-term targets, with detail on disclosure and corporate engagement.

"For some it makes more sense to focus more on corporate engagement, while others may focus more on policy advocacy," Mikula-Wright said. "Investors have to pick and choose where they're going to focus their energy over time."

The other seven organisations with case studies are Allianz (Germany), CalSTRS (US), Cathay Financial Holdigns, FAMA Investimentos, Mirae Asset Global Investments (South Korea), PensionDanmark (Denmark) and Sumitomo Mitsui Trust Asset Management (Japan).

Read more: Aware SuperInvestor Group on Climate ChangeUniSuperAsia Investor Group on Climate ChangeIFM InvestorsRebecca Mikula-Wright