New Zealand Super Fund releases climate change report

The New Zealand Superannuation Fund, the country’s sovereign wealth fund, has released the Climate Change Report 2022. According to the report, the fund committed to a net-zero 2050 target this year and achieved a 40% emissions-intensity reduction. The latter was a target set for 2025. The fund considers risk to be a core component of its climate change strategy and argues the most critical risk is reputational: “The most significant impact from operational risk related to climate change is damage to our reputation and long-term investment outcomes due to failure to integrate climate-related risks and opportunities into our investment processes”. Additionally, the report discusses the fund’s approach to engagement which it says is channelled through voting practices: “Our default position is to support climate change-related resolutions, unless there is a compelling reason not to. In 2018, we brought voting in-house rather than leaving it in the hands of several external investment managers voting different ways. In 2019, we began recalling shares lent out as part of our securities lending programme in order to vote on significant climate change issues.” The fund has a net asset value of NZ$55bn.