AustralianSuper is pledging to achieve net-zero carbon emissions in its investment portfolios and ramping up its commitment to renewables.
Following a board meeting in October, the super fund decided it was in members' best interest that it positions its portfolio to net-zero outcomes by 2050.
Since 2013, AustralianSuper has been measuring the carbon intensity of its equity portfolios via external consultant S&P/Trucost, and has made significant progress in reducing its carbon intensity by 44%, director of ESG and stewardship Andrew Gray said.
The super fund's Australian and international share portfolios have emitted 44% less carbon than the market index.
Gray said the super fund will work with initiatives such as Climate Action (CA) 100+, the Australian Industry Energy Transitions Initiative and Climate League 2030 to achieve its target. It has also committed to invest $1 billion in renewables by the end of 2022.
The Climate Council describes net zero emissions as balancing the amount of greenhouse gas emissions produced and taken out of the atmosphere.
Net zero means being able to still produce some emissions, as long as this is offset by processes that reduce greenhouse gases already in the atmosphere, like planting new forests.
To get to net zero, companies should emit new greenhouse gas as low as possible, which means rapidly phasing out fossil fuels such as coal, oil and gas, and transition to renewable energy, the Climate Council said.
IFM Investors and Cbus are some organisations that have committed to the initiative.
Gray said AustralianSuper has a major role to play in influencing and supporting the broad-based economic transition necessary to manage climate change.
"This is in line with global market expectations and consistent with our goal of maximising members' long-term