By Nick Hedley
NGS Super, the Australian retirement fund aimed at teachers
in non-government organizations, has sold its holdings of oil and gas companies
as part of its plans to achieve a carbon-neutral portfolio by 2030.
“To solve climate change, we need to rapidly transition to
energy sources that don’t emit carbon and methane into the atmosphere. At NGS
Super, we’re making bold moves to protect our members’ long-term investment
returns and their future,” Chief Investment Officer Ben Squires said in
a statement.
“We’re not a mega-fund, but with over AU$13 billion (US$9
billion) in funds under management, we can have a positive impact for our
members and our planet.”
NGS Super said it had sold its stakes in oil and gas groups Woodside
and Santos, among others. The roughly US$131 million in proceeds were
redistributed to other holdings within the fund’s equities portfolio.
The fund had previously set a target to reduce scope 1 and 2
emissions in its Diversified MySuper portfolio by 35% by 2025. To get there, it
enforced restrictions on companies that generate more than 30% of their sales
from thermal coal activities, or that operate in the extraction and production
of oil and gas.
“NGS’s research has shown that this divestment will reduce risk
and free up capital to invest across industries that are aimed at solving
climate change, such as green hydrogen, renewable energies, agriculture
solutions and automation,” the fund said.
Squires added that NGS Super was “walking the talk” and said
fossil fuel companies “are at risk of becoming stranded assets as the world
decarbonizes – especially if they are solely focused on upstream oil and gas
production.”
“By divesting these companies, we expect to generate higher
returns from allocating capital elsewhere.”