Cbus sharpens its ESG focus

Cbus, the industry super fund for the building, construction and allied industries, has released a responsible investment policy outlining how it will take environmental, social and governance (ESG) risks into account in its investment decision-making processes.

The fund, which has more than 780,000 members and manages over $48 billion in members’ money, has also signed up to the Australian Council of Superannuation Investors’ Australian Asset Owner Stewardship Code which is designed to promote greater transparency and accountability in how a fund undertakes its stewardship activities.

As a signatory to the code, Cbus must publish a Stewardship Statement on its website that describes how each of the code’s six principles have been applied or explains why a principle hasn’t been applied.

‘Responsible investment for Cbus means taking ESG risks and opportunities into account in the investment decision making process, exercising positive influence through our investments and the way the fund operates,’ says Cbus chief investment officer, Kristian Fok.

‘Our stewardship activities include engaging with companies directly, collaboratively and through service providers, voting at company meetings, advocacy and considering the stewardship capabilities of our external managers and their advocacy. This allows us to communicate our interests, enhance long-term value creation, and minimise risk.’

In its new policy document, Cbus notes that responsible investment means exercising a positive influence through fund investments and the operations of the fund itself.

It states: ‘As an asset owner and long-term investor, the trustee understands the significant responsibility in contributing to a sustainable economy and has articulated this through its recognition of the UN Sustainable Development Goals (SDGs).’

In line with this, the fund has adopted six voluntary and aspirational principles for incorporating ESG and SDGs into its investment processes.

It has also developed a position statement to help guide the integration of climate change considerations in accordance with its investment governance framework.

With many of its members working in the built environment, Cbus also plans to take a leadership role in making responsible investments in this area, including in the development of sustainable building and construction practices.

In addition, Cbus says it will strive to be a leader in responsible investment in the asset classes in which it invests directly.

In September, it set a target for all its property holdings to be net zero emissions by 2030. ‘This is a commercial decision that reflects Cbus’ values as a responsible investor,’ says Fok.

Conservative estimates suggest Cbus could hold more than $10 billion in property by 2030.

In April, Cbus announced that alongside the Dutch Infrastructure Fund, it had invested in an 80.1 per cent stake in wind and solar renewable generation assets.

‘This sustainable long-term investment is a significant milestone for the fund’s new direct infrastructure investment strategy as well as our commitment to addressing climate change,’ Cbus CEO David Atkin said at the time.

 

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