Climate change is a financial risk for our investments, that will have social and economic implications.

CFS believes climate is a financial risk. As a long term investor, we need to manage both climate risk and opportunities in order to achieve the best returns for our customers. 

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. 

 

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.

 

 

Our climate commitments

We are proud to have committed to the following targets: 

Target for 2050

We have committed to transitioning CFS FirstChoice investment portfolios to net zero Greenhouse Gas (GHG) emissions by 2050 (down to Scope 1 and 2 of investee companies).

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 transitioning CFS FirstChoice investment portfolios to net zero Greenhouse Gas (GHG) emissions by 2050 (down to Scope 1 and 2 of investee companies).

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.

Progress to date

Our climate action plan is underway, with key initiatives delivered to date including measuring and analysing emissions in the listed equity asset class, appointing a stewardship provider for our global equity investments, collaborating with peers to achieve common goals and working closely with our investment managers. 
 
CFS is committed to providing transparency to members on its progress towards meeting its net zero ambitions. An update on our progress can be viewed in the CFS FirstChoice Climate Report here.

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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.