Source: MIL-OSI Submissions
Source: New Zealand Super Fund – Joint statement from NZSF, ACC, GSF and NPF
28 October 2021 – The NZ Super Fund, ACC, Government Super Fund and National Provident Fund have welcomed the introduction of the Crown Responsible Investment Framework, announced today by Minister of Finance, Grant Robertson.
In response to the Framework the institutions have committed to transitioning their investment portfolios, which collectively total more than NZ$100 billion, to be aligned with a net zero emissions economy by 2050 or sooner.
All four investors have joined the Paris Aligned Investment Initiative’s Net Zero Asset Owners Commitment, under which they will make reductions in portfolio carbon footprint in line with a globally-accepted pathway. The investors will publicly report on the reductions they have made using common metrics.
Importantly, the funds will seek to invest in climate solutions in New Zealand and abroad, consistent with their respective investment strategies and commercial mandates. They will also use their collective influence as asset owners to engage with companies on climate change and emissions reductions, with the objective that all assets in their investment portfolios achieve net zero by 2050 or sooner.
Catherine Drayton, Chair of the Guardians of NZ Superannuation, the manager of the NZ Super Fund, said: “the Crown Responsible Investment Framework sets a strong and common foundation on climate action that is in line with global best practice for institutional investors. Confirming a net zero by 2050 target as a formal objective is a significant shift for the NZ Super Fund. We look forward to working with the companies in our portfolio to achieve this goal while maximising Fund returns over time. We will also continue to pursue commercially attractive opportunities to invest in climate solutions in New Zealand and internationally.”
Hon Steve Maharey, Chair of ACC, said: “The approach set out under the Crown Framework aligns with the Paris Agreement’s ambitions and a 1.5C limit on global temperature increases. For ACC, the Framework reinforces the commitment we have already made to both net zero by 2050 and investing in solutions that reduce New Zealand’s carbon emissions achieved through our Climate Change Impact Fund. The Framework will ensure New Zealanders see a faster reduction in our investment portfolio emissions by 2025.”
“Institutional investors have enormous influence globally and an important role to play as the world transitions to net zero,” Mr Maharey added. “If the Paris Agreement commitments are to be met, however, companies, governments and policy makers around the world will also need to step up – achieving net zero requires collective, urgent effort.”
Anne Blackburn, Chair of the Government Super Fund, said: “This announcement represents a significant step forward in climate ambition and portfolio emissions reduction for the Government Super Fund. We’re pleased that the Framework, in setting out the Government’s expectation that we make steady progress towards net zero by 2050, recognises that each fund has a different objective and investment style, and preserves our operational independence.”
Dr Edward Schuck, Chair of the National Provident Fund, said: “NPF supports the Framework and is confident it can align with its ambitions while continuing to act in the financial interest of its schemes’ members. We’re looking forward to collaborating with other investors to see emissions reductions achieved in the real economy.”
Dr Schuck said the announcement would send a strong signal to the broader New Zealand investment industry that best practice was aligning around net zero by 2050 emissions targets.
The four funds will respond to the Minister of Finance, and in the case of ACC, the Minister for ACC, by 31 December 2021, setting out how each will give effect to the Framework over the five years to 2025, and how they expect to transition to net zero between then and 2050.
The four Chairs welcomed the principles-based nature of the Framework, noting it provided each institution with flexibility in applying its own investment approach within the broader commitment to net zero by 2050.
About ACC
The Accident Compensation Corporation (ACC) is the Crown entity that delivers injury prevention initiatives and no-fault personal injury cover for everyone in New Zealand, including overseas visitors. ACC actively manages one of New Zealand’s largest investment funds (circa $50 billion) in order to cover the full future costs of all accepted claims. Around 60% of its assets are invested in New Zealand.
About GSF
The Government Superannuation Fund (www.gsfa.govt.nz/) was established in 1948 to provide a way for state sector employees to save for their retirement. Currently, the Fund has more than 50,000 members and manages more than $5 billion in assets. While closed to new members, the Fund expects to keep paying out annuities to members for another 50 years. It is managed by Annuitas Management Limited (www.annuitas.co.nz).
About NPF
The National Provident Fund (www.npf.co.nz/) is a group of government-guaranteed superannuation schemes, now closed to new members, and the Global Asset Trust, which holds the investment assets on behalf of those schemes. The Fund has around $1.9b assets under management. It is managed by Annuitas Management Limited (www.annuitas.co.nz).
About NZSF
The NZ Super Fund (www.nzsuperfund.nz) invests money on behalf of the New Zealand Government to help pay for the increased cost of universal pension entitlements in the future. By doing this the Fund adds to Crown wealth, improves the ability of future Governments to pay for universal pensions, and ultimately reduces the tax burden on future New Zealanders. A long-term, growth-oriented investor, the Fund has around NZ$58 billion in assets, including more than $8.7 billion invested in New Zealand. The Fund is managed by a Crown entity, the Guardians of New Zealand Superannuation.
