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Update on carbon footprint investment strategy

6 February 2018
Emissions intensity of listed shares reduced
The University has met a three-year target to reduce the carbon footprint of its share portfolio, a target set to address concerns about climate change and investment in fossil fuels.

In February 2015 the University set a goal of ensuring the carbon footprint of its share portfolio is 20 percent below its listed equity composite benchmark. The composite listed equity benchmark measures the emissions intensity of a hypothetical passive share portfolio with an asset allocation similar to the university’s. Its proportionate mix roughly represents the university’s allocation to Australian shares, overseas developed market shares and emerging market shares.

As at 30 September 2017 the emissions intensity of the University’s share portfolio was 22.7% below the composite benchmark.  Using absolute emissions as an alternative measure, the portfolio was 41.5% below the composite benchmark. This target has been met in part by appointing new fund managers and by instructing some managers to restrict the portfolio’s exposure to greenhouse gas emissions.

“We’ve made some active decisions to select fund managers who seek to maintain a lower carbon footprint,” said the University’s Chief Investment Officer Miles Collins.

Decisions around how the University will continue to manage the carbon intensity of its investment portfolio will be made during 2018. They will continue a commitment to address climate change while ensuring funds are invested wisely and aligned with the University’s obligations as a Trustee of funds endowed by donors and alumni for the benefit of staff and students.

“It is encouraging that investment strategies with a positive impact on environmental management and energy generation are on the rise,” said Mr Collins “It is our intent to incorporate more of these positive impact investments into the University’s portfolio as they can help both reduce our carbon footprint and meet our financial objectives,” Mr Collins added.

The University will continue to encourage companies to be transparent about their carbon emissions and set targets to reduce them. As a signatory to the CDP (formerly known as the Carbon Disclosure Project) the University has engaged more than 6,000 companies, asking them to publish their emissions and report on their strategy for addressing climate change. Last year more than 2,500 companies responded to the CDP climate change survey.

“When it comes to encouraging companies to play their part in reducing carbon emissions engagement is as important as investment management,” said Mr Collins. “Aside from our membership with the CDP and the UN Portfolio Decarbonisation Coalition we are encouraging our investment managers to engage with companies on environmental issues.”

The carbon footprint intensity of the University’s portfolio is measured in the fourth quarter of each calendar year. Latest results can be found here.