Case Study: Future Super - The World’s First Climate Neutral Super Fund
As a direct retail superannuation fund, Future Super wanted to be able to demonstrate how switching to a fossil fuel free superannuation fund compares to other activities, such as installing household solar power, in reducing an individual's carbon footprint.
Future Super is an ethical superannuation fund and the first fossil fuel free superannuation fund in Australia. It is the only superannuation fund that allows climate-concerned Australians to move their money away from fossil fuels and other causes of climate change, and into low carbon investments which help to create a better, fossil fuel free future. After launching in September 2014, Future Super has gained over 3500 members and $100 Million AUD in funds under management in just over 12 months.
What is the context?
Future Super already has a 100% fossil fuel free portfolio. As a result, the company knew that an analysis of its carbon footprint would be very low compared to the benchmark index and other Australian super funds. The company is committed to showing national and global leadership in ethical investment and fossil fuel free investing. While the risks of climate change and investment in fossil fuels are well understood, the Australian superannuation and investment community have been lagging behind in assessing the climate change risk in their portfolios and incorporating stranded asset risk into investment decisions.
What was the challenge?
Future Super was already committed to being completely fossil fuel free in its portfolio, and negatively screened companies with high carbon intensity. However, the company wanted to go further than this and become the World's first carbon neutral pension fund. To show leadership, Future Super wanted to not only analyse its carbon footprint and act as a case study for others to follow, but to go further and offset the carbon emissions in its portfolio. Through the purchasing of carbon credits, the fund would also be able to support a carbon reduction project with positive social and environmental impacts.
How did Future Super proceed?
Future Super contacted research company CAER, which provides ESG analysis used in constructing the fund portfolio. CAER introduced Future Super to South Pole Group, which explained that the process
involved would be to analyse the carbon footprint of the portfolio, and to purchase carbon credits to offset the emissions associated with companies in their portfolio
What was the solution?
South Pole provided an analysis of the fund's carbon intensity and provided offsets to compensate its remaining emissions. The analysis is an important tool in further understanding any remaining climate risks in the portfolio, as well as being able to demonstrate to direct retail clients the difference they can make from switching superannuation funds compared to other personal climate change actions.
About the client
Future Super is an ethical superannua-tion fund and the first fossil fuel free superannuation fund in Australia. It is the only superannuation fund that allows climate-concerned Australians to move their money away from fossil fuels and other causes of climate change, and into low carbon invest-ments which help to create a better, fossil fuel free future.
After launching in September 2014,
Future Super has gained over 3500 members and $100 Million AUD in funds under management in just over 12 months.
Future Superannuation Holdings Pty Ltd, is a financial services company dedicated to providing ethical and fossil fuel free financial products. As well as a superannuation fund, the company also provides fossil fuel free mortgage broking, retail and wholesale managed investment schemes, and operates two sharemarket indices – the Australian Fossil Free Index and the Australian Sustainability Leaders Index