Publication / 09 Sep 2008

Carbon Counts 2008: The Carbon Footprints of Australian Superannuation Investment Managers

Trucost analysis of the carbon impacts of 100 portfolios in 14 Super Funds, highlighting the effects of different investment styles on carbon performance.

AIST was the first independent professional body of its kind to commission a quantitative assessment of carbon risks across Australian Superannuation investment managers. As owners of major corporations, Superannuation Funds need to understand how the value of their investments could be affected by the physical impacts of climate change, as well as by Government regulations to control greenhouse gas emissions.

Trustees will increasingly expect asset managers to identify portfolio holdings with the greatest financial risk from carbon costs. The report that Trucost produced for AIST has taken the lead in identifying how Australia’s Superannuation Funds and their external investment managers are positioned with respect to a policy framework that imposes the costs of greenhouse gas emissions on company balance sheets.

The combined emissions associated with portfolio holdings amount to 1.4% of Australia’s emissions in 2006, or 5.9 million tonnes of greenhouse gases. For every million Australian dollars of revenue generated by companies in the ASX 200 Index, 370 tonnes of greenhouse gases are emitted. The carbon footprint of the ASX 200 is 20% larger than the carbon footprint of the MSCI All World Developed Index and almost 40% smaller than the relatively carbon-intensive MSCI Asia ex-Japan Index. The carbon intensity of Superannuation Funds varies widely. There is a 36% difference between the largest and smallest carbon footprints of Funds and an eight fold variation in efficiency between individual portfolios. Funds with smaller carbon footprints are less exposed to carbon costs which are expected to escalate.

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