Paving the way for a brighter future with a whole of fund approach to ESG

2 May 2024

To deliver the best outcomes for members, Brighter Super is continuing to uplift and enhance its approach to Environmental, Sustainability and Governance (ESG) issues across its new investment option line up.

Brighter Super CEO Kate Farrar said as a long-term investor, the fund takes a long-term view on investments and ESG issues, particularly climate change, which poses a serious risk to the long-term value of the investments we hold.

“Now that we have finished the integration of our mergers and the streamlining of our investment menu on 31 May 2024, we are increasing our focus, particularly on climate, by employing additional experts into our team and entering a new partnership with the Australian Council of Superannuation Investors (ASCI),” Ms Farrar said.

The Fund started its ESG journey back in 2022 and has since undertaken a ‘deep-dive’ to identify assets which had a higher degree of climate change risk and identified the biggest risks to the fund’s investments is in its listed equity portfolios.

Ms Farrar said as a result of this work, Brighter Super is targeting a reduction in carbon emissions intensity of 30% by 2030 across the equity investment portfolio from its 2022 emission levels.

Brighter Super Head of Listed Equities and ESG Fiona Mann said, “We have a solid plan, and we have a clear pathway to achieve the 30% reduction and pleasingly recent portfolio decisions have resulted in almost a 9% reduction in carbon intensity (scope 1 & 2 emissions) across all our equity portfolios”.

As part of the streamlining of its investment menu, Brighter Super has made the decision to close its two Socially Responsible investment options. This decision considered factors such as costs, investment performance and risk, socially responsible investing capabilities and the declining number of members investing in these two options. 

Ms Farrar said these options had been legacy products with less than 1% of members invested and ultimately, it was not in members’ best interests to continue to offer them. 

“We take ESG seriously and the closure of these options allows the fund to allocate our expertise into a more contemporary sustainable investment strategy and portfolio across the fund as a whole,’’ Ms Farrar said.

She said the fund was taking substantial steps to deepen its ESG approach and she was excited to see the results of the foundational work that had been achieved.

“We are committed to achieving our emission reduction target in the best interest of members,’’ Ms Farrar said.

The fund will publish its first Sustainability Report for the 2024 financial year ahead of the Annual Members’ Meeting in the second half of this year.

 

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