Responsible Investing
Responsible investment considers a range of environmental, social, governance (ESG) and climate factors in conjunction with normal financial analysis.
FS Climate Action – We commit to a Net Zero target by 2050
Climate change can pose significant risks –to the environment, the economy and to society as a whole.
CFS believes climate is a financial risk that will have economic and social impact and as a long term investor, we need to manage both climate risk and opportunities in order to achieve the best returns for our customers. We are proud to have committed to the following targets:
Target for 2050
We have committed to transitioning CFS investment portfolios to net zero Greenhouse Gas (GHG) emissions by 2050.
This target aligns CFS to the Paris Agreement goal to limit global warming to well below 2 degrees. It is also consistent with international scientific research.
In order to reach our 2050 target we have a Climate Action Plan, which sets out how we will make this transition in our portfolios whilst protecting the investments of our customers.
We will manage the risks and opportunities found in transitioning to a lower carbon world, and we have begun this with our nearer term goal.
Target for 2030
We have committed to a 30% reduction in Greenhouse Gas emissions from 2019 levels for the CFS investment portfolios;
CFS will review the 2030 target on a regular basis to reflect improvements in data and change in assets. It will monitor and disclose progress to demonstrate advancement towards the 2030 target.
As an initial step, CFS has become a signatory to Climate Action 100+, an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
So what does Net Zero mean?
Climate science strongly links the warming of the climate to significant increases in the levels of greenhouse gas emissions1 in the atmosphere. The latest Intergovernmental Panel on Climate Change Assessment Report 6 (IPCC AR6), provides evidence that the increase in global surface temperature has been contributed to by human activity. So, to stabilise climate change, greenhouse gas emissions need to reduce.
In the Paris Agreement 2015, governments agreed to hold the increase in the global average temperature to well below 2 degrees centigrade above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5 degrees centigrade above pre-industrial levels. They recognised that this would significantly reduce the risk and impacts of climate change. The IPCC report on Climate Change in 2018 then stated that to achieve the Paris agreement target, global emissions needed to reach “Net Zero” by mid century (2050).
Net Zero is a balance between the GHG emissions produced and the GHG emissions taken out of the atmosphere. There are many sectors where it is possible to target zero emissions, however there are some sectors like aviation, and agriculture where it is difficult to reach zero emissions. Hence, there is a need to offset these emissions and take them out of the atmosphere.
Net Zero is not a call to divest from all energy companies. We want to encourage the companies that will provide us with a just transition to a low carbon future and we want to continue to invest in those companies that are moving into renewable and sustainable sources of energy
How is this achieved?
- There is a global transition happening from high carbon investments (including fossil fuels), towards lower carbon investments (such as solar and wind), and we will encourage our managers to align their actions with the Net zero commitment
- Engaging with our investment managers, and the companies they invest in, to work towards less emissions within the economy (such as using electric vehicles, energy efficient offices or more efficient use of resources in production[PC2] ) and to adhere to the principles of “just transition” where needed.
- Collaboration with other investors to encourage decarbonisation efforts (such as our membership of the Investors Group on Climate Change in June 2020[PC3] and very recently joining Climate Action 100+ ).
There is a growing urgency to taking action on climate change. Through targeted engagement and emission reduction targets CFS will show our customers that we are committed to manage climate risk and opportunity within our portfolios.
As developments unfold, our team will continue monitoring market developments and maintaining close communications with our skilled investment managers to identify the risks and opportunities of investing. We will also keep our customers informed each step of the way with timely market updates and other helpful resources on our responsible investment journey.
1. Largely CO2 but also includes methane, nitrous oxide, fluorinated gases.
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Information on this webpage is provided by Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) and Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL). It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the Target Market Determinations (TMD) for our financial products at www.cfs.com.au/tmd, which include a description of who a financial product might suit. You should read the Financial Services Guide (FSG) available online for information about our services. This information is based on current requirements and laws as at the date of publication.
Tax considerations are general and based on present tax laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. AIL and CFSIL are not registered tax (financial) advisers under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise under a tax law.
Things you should know
Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments.
Information on this webpage is provided by AIL and CFSIL. It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the target market determinations (TMD) for our financial products at https://www.cfs.com.au/tmd which include a description of who a financial product might suit. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. You can get the PDS and FSG at www.cfs.com.au or by calling us on 13 13 36.