Industry fund cuts property portfolio emissions

A $46 billion industry fund is aiming to slash its property portfolio emissions to zero by 2030.

Cbus chief investment officer Kristian Fok laid out a roadmap of what the fund wants to achieve at the recent Global Climate Action Summit held in San Francisco.

He said the move was based on a commercial decision that reflects the super fund's values as a responsible investor.

"We know that the commercial market is looking for high-tech, low emissions tenancies. What's more, we can access cheaper finance from lenders who view high-quality building projects as low-risk assets," he said.

Cbus has about $5 billion of property investments via its flagship Cbus Property subsidiary and property fund managers such as ISPT and AMP.

The fund managers have been informed they have until 2020 to outline their strategy to reach net zero emissions holdings with the 2030 deadline in mind.

Based on conservative estimates, Fok said the fund could hold more than $10 billion in property by 2030.

"This is beyond just installing roof top solar panels. Operable facades that both insulate and produce energy are the future. Buildings must be ready to adapt to these changes," Fok said.

"Smart systems for climate control are improving every year and are an exciting area of energy efficiency."

While Australia is locked in a policy quagmire on climate action, the world is moving on and this makes sound investment and economic sense, he added.

"The world needs to keep warming below two degrees and we have an obligation to future proof our investments to support our members' retirement."

A global study by the Asset Owners Disclosure Project found more than 60% have little or no climate change strategy. This includes a number of Australian superannuation funds.

The report shows 63% of the world's largest pension funds provide very little information on the financial implications of climate change on their investment portfolios. Some provide no such information at all.

First State Super is the highest ranking Australian fund, receiving a BBB-rating and ranking 13th in the world. It is also the highest ranking fund in Asia Pacific.

Read more: CbusKristian FokSuperannuationFirst State SuperGlobal Climate Action Summit
Link to something 4qAIF3QS