Managing risks and opportunities
Managing risks and opportunities

Climate change is an environmental, social and economic risk that affects everyone – all countries and all sectors of the economy. At VicSuper, we consider how best to reduce or avoid the negative impacts of climate change by managing climate risks across our portfolio. As a Fund that invests across global economies, we also believe we have a role to play in engaging the companies we invest in to drive positive change.

We support the objectives of the Paris Climate Agreement, which aims to keep global warming below 2°C. We believe that the Agreement will help map a pathway to a safer climate and economic prosperity, and that stable and well-planned action on climate change will protect our investments over the long term and provide investors with certainty.

We have in place a CEO led Climate Change Steering Committee and we’re in the process of implementing our Climate Change and Investments Strategy. Both of these support the implementation of our TAKE2 Climate Pledge.
Climate change is an environmental, social and economic risk that affects everyone – all countries and all sectors of the economy. At VicSuper, we consider how best to reduce or avoid the negative impacts of climate change by managing climate risks across our portfolio. As a Fund that invests across global economies, we also believe we have a role to play in engaging the companies we invest in to drive positive change.

We support the objectives of the Paris Climate Agreement, which aims to keep global warming below 2°C. We believe that the Agreement will help map a pathway to a safer climate and economic prosperity, and that stable and well-planned action on climate change will protect our investments over the long term and provide investors with certainty.

We have in place a CEO led Climate Change Steering Committee and we’re in the process of implementing our Climate Change and Investments Strategy. Both of these support the implementation of our TAKE2 Climate Pledge.

What is TAKE2?
What is TAKE2?

TAKE2 is Victoria’s collective climate change pledge initiative to reach net zero emissions by 2050, and keep the global temperature rise to under 2 degrees.

VicSuper’s pledge summarises our Fund’s operational, investment process and engagement actions we are taking to contribute to action on climate change.


TAKE2 is Victoria’s collective climate change pledge initiative to reach net zero emissions by 2050, and keep the global temperature rise to under 2 degrees.

VicSuper’s pledge summarises our Fund’s operational, investment process and engagement actions we are taking to contribute to action on climate change.
  • Portfolio carbon foot printing
    Portfolio carbon foot printing

    Each year VicSuper measures the greenhouse gas emission intensity of our equities portfolio. A carbon intensity measure allows us to compare the greenhouse gas intensity of our portfolio year-on-year, despite our funds under management increasing over time.

    VicSuper invests in thousands of companies, across the global economy. So we need to understand and manage our portfolio climate risks. Measuring the amount of greenhouse gas associated with the equity investments in our portfolio contributes to understanding where carbon risks and opportunities sit within the portfolio. It also helps us meet our Montreal Pledge obligations. By signing the Pledge we have formally committed to measuring and publicly disclosing the carbon footprint of our portfolios on an annual basis.

    At the end of April 2016, our equities investments represented approximately A$9.3 billion and approximately 58% of our entire portfolio.1 Since 2008, when we began measuring our carbon footprint, the intensity of the portfolio has decreased by approximately 21%.

    What do the trends mean?

    We aim to reduce the carbon intensity of the portfolio without negatively impacting risk adjusted investment performance.2 Our strategy of integrating Environmental, Social and Governance factors into our investment process helps us to manage carbon risks. We also actively engage with many of the companies we invest in to help them improve how they manage carbon risk and the transition to a low carbon economy.

    How is our carbon intensity calculated?

    VicSuper engages the UK-based, research company Trucost to measure the carbon footprint and intensity of VicSuper Fund's listed equities. Trucost estimates carbon efficiency and quantifies carbon risk based on data publicly disclosed by the companies in our portfolio.

    Portfolio emissions graph

    *In 2013, the benchmark was changed from the MSCI World ex Australia Index to the MSCI All Country World Index. In 2016 the benchmark was changed from the MSCI All Country World Index to a custom benchmark which more closely mirrors the allocation to international, Australian and emerging market investments in VicSuper’s equity portfolio.
    Each year VicSuper measures the greenhouse gas emission intensity of our equities portfolio. A carbon intensity measure allows us to compare the greenhouse gas intensity of our portfolio year-on-year, despite our funds under management increasing over time.

    VicSuper invests in thousands of companies, across the global economy. So we need to understand and manage our portfolio climate risks. Measuring the amount of greenhouse gas associated with the equity investments in our portfolio contributes to understanding where carbon risks and opportunities sit within the portfolio. It also helps us meet our Montreal Pledge obligations. By signing the Pledge we have formally committed to measuring and publicly disclosing the carbon footprint of our portfolios on an annual basis.

    At the end of April 2016, our equities investments represented approximately A$9.3 billion and approximately 58% of our entire portfolio.1 Since 2008, when we began measuring our carbon footprint, the intensity of the portfolio has decreased by approximately 21%.

    What do the trends mean?


    We aim to reduce the carbon intensity of the portfolio without negatively impacting risk adjusted investment performance.2 Our strategy of integrating Environmental, Social and Governance factors into our investment process helps us to manage carbon risks. We also actively engage with many of the companies we invest in to help them improve how they manage carbon risk and the transition to a low carbon economy.

    How is our carbon intensity calculated?

    VicSuper engages the UK-based, research company Trucost to measure the carbon footprint and intensity of VicSuper Fund's listed equities. Trucost estimates carbon efficiency and quantifies carbon risk based on data publicly disclosed by the companies in our portfolio. 
  • Operational carbon foot printing
    Operational carbon foot printing

    VicSuper has been managing and reporting operational green house gas emissions since 2006 and we have a number of initiatives in place that contribute to reducing our emissions.

    In 2015/16 our operations were responsible for emitting approximately 745 tonnes of carbon dioxide emissions (CO2e), a relatively small emissions footprint for a business of our size. Our Melbourne head office has been awarded 6 Star Green Star and 5 Star NABERS Energy ratings. These ratings mean that our new offices have been designed to reduce energy consumption by 50% when compared to a typical Melbourne office building. In addition to generating positive environmental outcomes, these efficiencies will also contribute to operational cost savings over time.

    Despite our business having grown considerably, our emissions have continued to decrease. In 2015/16 VicSuper’s emissions intensity was 2.88 tonnes CO2e per employee. This means we have reduced our emissions intensity by over 50% over the last five years.

    VicSuper’s operations are carbon neutral. After minimising our emissions, we have purchase carbon offsets through Climate Friendly to neutralise the remainder. Our purchased carbon offsets provide support for a number of emissions reduction projects around the world. VicSuper’s offsets are currently supporting the Urumqi Tuoli Wind Farm in China.

    operational emission graph

    VicSuper has been managing and reporting operational GHG emissions since 2006 and we have a number of initiatives in place that contribute to reducing our emissions.

    In 2015/16 our operations were responsible for emitting approximately 745 tonnes of carbon dioxide emissions (CO2e), a relatively small emissions footprint for a business of our size. Our Melbourne head office has been awarded 6 Star Green Star and 5 Star NABERS Energy ratings. These ratings mean that our new offices have been designed to reduce energy consumption by 50% when compared to a typical Melbourne office building. In addition to generating positive environmental outcomes, these efficiencies will also contribute to operational cost savings over time.

    Despite our business having grown considerably, our emissions have continued to decrease. In 2015/16 VicSuper’s emissions intensity was 2.88 tonnes CO2e per employee. This means we have reduced our emissions intensity by over 50% over the last five years.

    VicSuper’s operations are carbon neutral. After minimising our emissions, we have purchase carbon offsets through Climate Friendly to neutralise the remainder. Our purchased carbon offsets provide support for a number of emissions reduction projects around the world. VicSuper’s offsets are currently supporting the Urumqi Tuoli Wind Farm in China.

1 At present VicSuper only measures the greenhouse gas emission associated with the equity component of our portfolio. We have not sourced robust data on carbon emissions for the other asset classes that we invest in.
2 The carbon intensity of VicSuper's portfolio may fluctuate over time depending on the holdings within VicSuper’s investment portfolio.
1 At present VicSuper only measures the greenhouse gas emission associated with the equity component of our portfolio. We have not sourced robust data on carbon emissions for the other asset classes that we invest in.
2 The carbon intensity of VicSuper's portfolio may fluctuate over time depending on the holdings within VicSuper’s investment portfolio.