State of the climate report confirms need for climate-aware investing: Future Super

Recent observations by CSIRO and the Bureau of Meteorology (BOM) on the pace and severity of climate change "confirms what people already know" and also gives impetus for investing in line with reducing the risks and effects of climate change, according to Future Super.

The CSIRO and the BOM has issued its State of the Climate 2020 report, which notes continued warming of Australia's climate, an increase in extreme fire weather and length of the fire season, declining rainfall in the southeast and southwest of the continent, and rising sea levels.  The report also cited continued increase in global annual mean carbon dioxide (CO2) concentrations reaching 410 ppm in 2019 and the CO2 equivalent (CO2-e) of all greenhouse gases reaching 508 ppm, "the highest levels seen on Earth in at least two million years."

"Bushfires, floods and global pandemics are likely to be a part of our lives with climate change progressing at the rate it is," said Kirstin Hunter, co-founder and CEO of Future Super. "In terms of greater fire threat, changes to rainfall, likely flooding, continuing ocean warming, those affects are happening sooner than we expected and are likely to stick around unless we take action soon."

Investing with the long term retirement needs of members in mind means considering the risks of climate change in terms of valuations, impact on value of investment and the risks that climate change pose to people and planet, Hunter said.

The State of the Climate 2020 report also noted that globally averaged air temperature at the Earth's surface has warmed by over 1 C since reliable records began in 1850, and that "each decade since 1980 has been warmer than the last, with 2010-19 being around 0.2 C warmer than 2000-09."

"Investors need to take climate risks into consideration when they're making climate decisions today," Hunter said. "It's not something they can put off in the future."

Future Super's Balanced Impact superannuation fund option has had a return of 5.02% in the year to 30 June 2020, 7.31% in the three years to June 2020 and 6.48% in past five years to 2020, according to Rainmaker Information research. That puts it in fourth place for ESG options across all asset classes.

"The increasing urgency around climate change, the increasing visibility of climate change in people's lives has resulted in a huge amount of growth [for Future Super]," Hunter said. "People across Australia are sitting up and taking notice. They know that they own their superannuation and are taking an active role in grabbing hold of that power and putting it to use to build the type of future they want to see.

"What we're really seeing at the moment is a big increase in engagement as Australians to take individual action."

Read more: Future SuperAustraliaCSIROBureau of MeteorologyEarthBOMKirstin HunterAustraliansESGRainmaker Information
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