Jul 07, 2010 - 5:00pm
The world’s first climate change advocacy fund was launched today by Australian Ethical Investment and puts Australia’s biggest companies on notice that they will face greater shareholder scrutiny of their climate change policy and strategy.
Called the Climate Advocacy Fund (CAF), the purpose of the initiative – partnered by The Climate Institute – is to promote constructive company engagement and shareholder resolutions to influence Australia’s biggest companies to better manage climate change risk.
It differs from traditional “green” funds which typically invest in renewable energy, low-carbon assets.
The CAF is using it’s ownership of carbon-intensive companies to influence their behaviour and launch Australia’s first climate change shareholder resolution. This, and the dual objective to match, or better, the return of the ASX 200, makes it the first of its kind in the world.“Companies are on notice that a head-in-the-sand approach to climate change and carbon pollution won’t be acceptable to shareholders and that they must start taking responsibility for their future liabilities,” Julian Poulter, The Climate Institute’s Business Director.“Superannuation funds manage over a trillion dollars of retirement money which is at risk from climate change. Superfunds have a responsibility to be more active owners and encourage their investee companies to reduce climate risk and drive better emissions management. “The ASX 200 companies are responsible for around half of Australia’s carbon pollution yet few high emitters have strategies which align with what is required to support the objectives of the Copenhagen accord.”“This year will see Australia’s first climate change shareholder resolution – it will be a great opportunity for all those funds who are signatories to Carbon Disclosure Project and UNPRI to exercise their influence.”James Their, Executive Director of Australian Ethical Investment, said the CAF was about improved corporate behaviour, giving a unique voice to shareholders and delivering strong performance.“Investing in the CAF is about making money and making a difference,” said Mr Thier.“The CAF gives a collective voice to shareholders and is an innovative way to influence corporate behaviour as well as generate financial returns which makes the fund the first of its type in world. “For individuals, investing in the CAF is an opportunity to put your otherwise inactive investment into limiting pollution and reducing risks of climate change within your long-term investments. “There is a significant responsibility and opportunity for investment markets, and a fund such as this, to step into the void left by the failure of the political process.”The initial focus of the CAF will be improved emissions disclosure and high carbon capital investment decisions - information that is critical to investors who are assessing a company’s future performance.Subsequent resolutions will look at what plans and strategies a company has in place to reduce emissions.The CAF is a fundamental index fund which invests in ASX 200 companies according to their economic footprint. Anyone can invest in the CAF, from individuals to institutional investors. To find out more about the CAF visit the www.climateadvocacyfund.com.auNotes to editors:
The Climate Institute Business Director Julian Poulter
; Communications Director Harriet Binet or
Australian Ethical Investment Executive Director James Thier