The $24 billion VicSuper fund has hit its $3 billion sustainable investment target one year early as it meets eight of the United Nation’s sustainable development goals.

Their holdings include $1.5 billion in low-carbon global equities, $722 million in green property and $344 million in so-called socially conscious equities and fixed income that screen for fossil fuels. In its annual report published this week, the superfund said it is reporting how they have contributed to broader societal outcomes including taking action on climate change. The investments now makes up 12 per cent of the entire portfolio.

“Community expectations are growing and funds must have a clear strategy in place to deliver on these goals,” said chief executive officer Michael Dundon, who is in the process of merging the fund with First State Super. They need “a way of measuring and reporting, so it’s clear to members where their money is invested and the impact those investments have.”

VicSuper was this year among six Australian super funds to be named world leaders in responsible investing by the Principles of Responsible Investment, joining a list of 47 global asset owners. According to the Global Sustainable Investment Alliance, at least $31 trillion was allocated to sustainable assets in 2018, with Australia and New Zealand accounting for 63 per cent.

The Melbourne-based super fund said it can now measure how their member’s retirement savings support the goals by highlighting the dollar contribution to each SDG across the entire equity portfolio and through assets such as wind, solar, waste-to-energy assets and low-carbon equities.

“Transparency is essential,” said Dundon. “It’s no longer enough to talk to your process – funds need to talk to outcomes.”

Climate action is one of the eight goals that VicSuper has prioritised alongside quality education, affordable and clean energy, and good health and wellbeing. The fund said it was taking steps to align their investment decisions and activities with the goals. The UN set 17 sustainable development goals in 2015 to be met by 2030.

“As our funds under management grows, so does our responsibility to the broader society, above and beyond providing our members with the best possible retirement outcomes,” the CEO said. “We can do both.”

 

Sarah Jones worked for Bloomberg News in London for more than 12 years covering equity markets and global asset management. Prior to moving to the UK, she worked for Australian Associated Press in Sydney covering economics and monetary policy.
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