Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

NZ Super Fund divests carbon investments over 'undue risk'

NZ Super Fund divests carbon investments over 'undue risk', Orr says

By Sophie Boot

Feb. 21 (BusinessDesk) - The New Zealand Superannuation Fund has been divesting investments with carbon exposure as it believes the emission is currently underpriced and represents a risk for the future.

Outgoing Super Fund chief executive Adrian Orr told Parliament's finance and expenditure select committee this morning that the fund committed to reducing its portfolio exposure to carbon reserves by 40 percent and carbon emissions by 20 percent by 2020, and is "almost there now".

The decision to reduce the fund's exposure to carbon hasn't come under its ethical investment commitment, but instead under its mandate to maximise return without undue risk, Orr said.

"We put it up there because it's our belief that carbon is mispriced globally, because there is no global price for carbon, and investment behaviours suggest at some point there is going to be winners and losers through this. We don't know what that looks like, so by not doing anything we are taking on undue risk - we're overexposed to carbon," Orr said.

"We swapped out close to $1 billion of assets from carbon to non-carbon companies, and you can do that overnight," he said. "The harder bit is about engaging with external managers about what their view is on carbon exposure to work on the remainder of the portfolio, as well as to assess investment opportunities going into the climate change world as well, alternative energies, ways of building communities."

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

"It's going to affect everyone in so many different ways, and it's saying how can we try to be at the front edge of those investment opportunities. That's hard, because it's going into the future, but the simpler part is first and foremost reduce our exposure."

Orr will leave next month to head up the Reserve Bank, with the fund's chief investment officer Matt Whineray taking over on an interim basis. The Super Fund has said it would like to find a replacement by mid-May, and said today it has appointed a recruitment agency for the task.

(BusinessDesk)

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.