Our strategy
Our strategy

Climate change is an environmental, social and economic risk that affects everyone – all countries and all sectors of the economy. 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 better protect our investments over the long term and provide investors with more certainty.

At VicSuper, we consider how best to reduce or avoid the negative impacts of climate change by managing climate change risks across our portfolio. We also consider the opportunities that climate change may present. As an active owner that invests across global economies, we also believe we have a role to play in engaging with the companies we invest in and participating in the climate public policy debate to encourage positive, transformational change.

VicSuper has developed a 2020 Climate Change and Investments Strategy. Our work on managing climate change risk has been building over the last few years. The Asset Owners Disclosure Project currently ranks us within the top 7% of funds internationally when it comes to managing climate risk. We also have a record $1 billion invested in assets that have climate change benefits, including renewable energy, sustainable forestry and agriculture and dedicated climate mandates. You can find out more about our strategy in the diagram below:

Climate change table

Climate change is an environmental, social and economic risk that affects everyone – all countries and all sectors of the economy. 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 better protect our investments over the long term and provide investors with more certainty.

At VicSuper, we consider how best to reduce or avoid the negative impacts of climate change by managing climate change risks across our portfolio. We also consider the opportunities that climate change may present. As an active owner that invests across global economies, we also believe we have a role to play in engaging with the companies we invest in and participating in the climate public policy debate to encourage positive, transformational change.

VicSuper has developed a 2020 Climate Change and Investments Strategy. Our work on managing climate change risk has been building over the last few years. The Asset Owners Disclosure Project currently ranks us within the top 7% of funds internationally when it comes to managing climate risk. We also have a record $1 billion invested in assets that have climate change benefits, including renewable energy, sustainable forestry and agriculture and dedicated climate mandates. 

Climate Action 100+ initiative
Climate Action 100+ initiative

VicSuper has joined more than 225 global investors with more than US$26 trillion in assets under management to engage the world’s largest emitting companies to act on climate change.
Climate change is an environmental, social and economic risk that affects everyone – all countries and all sectors of the economy. 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 better protect our investments over the long term and provide investors with more certainty.

At VicSuper, we consider how best to reduce or avoid the negative impacts of climate change by managing climate change risks across our portfolio. We also consider the opportunities that climate change may present. As an active owner that invests across global economies, we also believe we have a role to play in engaging with the companies we invest in and participating in the climate public policy debate to encourage positive, transformational change.

VicSuper has developed a 2020 Climate Change and Investments Strategy. Our work on managing climate change risk has been building over the last few years. The Asset Owners Disclosure Project currently ranks us within the top 7% of funds internationally when it comes to managing climate risk. We also have a record $1 billion invested in assets that have climate change benefits, including renewable energy, sustainable forestry and agriculture and dedicated climate mandates. 

Concerned about climate change?
Concerned about climate change?

If you’d like to avoid investing in companies that potentially contribute to climate change, cause social harm or infringe human rights, our Socially Conscious investment option may be right for you.
If you’d like to avoid investing in companies that potentially contribute to climate change, cause social harm or infringe human rights, our Socially Conscious investment option may be right for you.

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 resilience and foot printing
    Portfolio resilience and foot printing

    VicSuper invests in thousands of companies, across the global economy. So we need to understand and manage our portfolio climate risks.

    In late 2016 we appointed Mercer to undertake a portfolio climate risk assessment across different climate scenarios and time horizons out to 2050. This analysis identified that climate change does pose a risk to returns for us, as it does for many of our peers in the superannuation and investments sector. But importantly, Mercer’s research found that VicSuper is well placed to manage this risk thoughtfully and progressively over the medium and long term.

    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. This also helps us understand where carbon risks and opportunities sit within the portfolio and fulfils 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 May 2017, our equities investments included in the carbon footprint analysis represented approximately A$8.6 billion and approximately 46% of our entire portfolio.1 In 2017 the carbon intensity of the measured equity portfolio was 251.6 tonnes of CO2e/A$M. This is 10% lower than the intensity reported last year (279.6 CO2e/A$M in 2016) and below the portfolio benchmark. Since 2008, when we began measuring our carbon footprint, the intensity of the equities portfolio has decreased by approximately 30%.

    Graph

    *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.

    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

    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 invests in thousands of companies, across the global economy. So we need to understand and manage our portfolio climate risks.

    In late 2016 we appointed Mercer to undertake a portfolio climate risk assessment across different climate scenarios and time horizons out to 2050. This analysis identified that climate change does pose a risk to returns for us, as it does for many of our peers in the superannuation and investments sector. But importantly, Mercer’s research found that VicSuper is well placed to manage this risk thoughtfully and progressively over the medium and long term.

    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. This also helps us understand where carbon risks and opportunities sit within the portfolio and fulfils 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 May 2017, our equities investments included in the carbon footprint analysis represented approximately A$8.6 billion and approximately 46% of our entire portfolio. In 2017 the carbon intensity of the measured equity portfolio was 251.6 tonnes of CO2e/A$M. This is 10% lower than the intensity reported last year (279.6 CO2e/A$M in 2016) and below the portfolio benchmark. Since 2008, when we began measuring our carbon footprint, the intensity of the equities portfolio has decreased by approximately 30%.

    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
    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.