UCA Funds Management Chief Executive Officer Michael Walsh admits he is sceptical about the results achieved when investment institutions add their name to action plans which tackle issues such as climate change.
“Over more than 20 years in the ethical investment industry I have seen a lot of firms sign up to show support for initiatives relating to climate change. While it is easy to show support by signing up, achieving the changes we need is much harder,’’ he said.
“Companies say that want to make progress but not enough actually happens.’’
Mr Walsh was commenting on the launch in Paris last week of the Climate Action 100+ campaign. The campaign is a five-year investor-led initiative designed to engage with the world’s largest corporate emitters to curb emissions, strengthen climate-related financial disclosures and increase governance on climate change.
It seeks to implement the commitment first set out in the Global Investment Statement on Climate Change adopted prior to the 2015 Paris Agreement.
The hit-list of 100 companies includes Australian miners Rio Tinto and BHP Billiton and Wesfarmers, which owns Coles, Bunnings, Target and Officeworks as well as having interests in coal mining. It is claimed the global list of companies is responsible for 15 percent of global emissions.
The initiative is supported by more than 200 of the world’s biggest investors responsible for about $26 trillion in assets. Australian supporters include superannuation entities Australian Super, Vic Super, First State Super, Hesta and Cbus and Sydney-based global investment manager AMP Capital.
The chief executive of the Investor Group on Climate Change in Australia, Emma Herd, said two years on from the Paris Agreement investors wanted to see “action that’s faster and goes further than what we have seen before”.
Mr Walsh agreed that there was an urgent need for everyone to work towards the target of limiting the rise in global average temperatures to no more than two degrees.
UCA Funds Management has long maintained an investment portfolio that mirrors its environmental responsibilities to alleviate climate change.
It avoids investing in companies whose practices have a negative impact on the environment and excludes all those involved in the mining and export of uranium and thermal coal as well as unconventional oil and gas extraction. Rio Tinto and BHP Billiton are among the companies excluded on this basis .
UCA Funds Management’s Australian share portfolio has a low carbon footprint relative to the overall Australian Stock Exchange.
Exposure to the five most carbon-intensive industries – capital goods, energy, materials, transport and utilities – on the Australian Stock Exchange sits at about 27 percent. UCA Funds Management’s exposure is less than half of that.
The funds manager’s positive ethical screen also seeks to support companies with major business in areas such as clean energy, recycling and sustainable agriculture.
Its positive list currently includes companies involved in LED lighting technology and water efficiency.