NGS Super statement on responsible investment
14 Dec 2023 2 min readThe ABC has made a number of misleading comparisons and inaccurate claims in an article, ‘Selling the Green Dream’, published on Thursday December 14, 2023 — and NGS Super has requested a correction be published.
The ABC’s comparison of NGS Super as an aggregate fund with much smaller investment options dedicated to sustainable or ethical investing within funds, is misleading and inaccurate. Ensuring Australians are accurately informed about how their retirement savings are invested and how responsible investing principles are applied to their investments is critical and at the essence of avoiding greenwashing. The ABC has a responsibility to correct the record to prevent misleading all Australians with super savings.
NGS Super does not have sustainable or ethical investment options. Responsible investment is ingrained in everything we do. However, the ABC has compared ‘apples with oranges’ by taking the full value of assets held across the NGS Super fund and listing this alongside specific assets held within individual investment options at other funds, dramatically skewing the figures.
The article also includes sweeping statements that strongly imply disconnect between policy and investments, such as “In many cases, they do not completely prohibit investment in fossil fuels.” NGS does not state that we prohibit investment in fossil fuels completely — in fact, the definition of what we exclude is printed directly next to the point in our Responsible Investment Policy, which is publicly available on our website. This reporting is deliberately misleading.
NGS Super has a clear, and what has proven to be an effective plan to be carbon neutral by 2030. Part of this plan is to continue to divest in fossil fuels in a sustainable way that considers both investment risk and returns and climate risk.
NGS Super invests by balancing the need to manage investment risk and climate risk, while maximising returns for our members. We were the first super fund to set a target of 2030 for a carbon neutral investment portfolio and we’re making faster-than- expected progress towards this ambitious goal. We’re doing this transparently and whilst protecting our members’ investment returns.
Our investment decisions are always aligned with our responsible investment policy. Our policy clearly states that the fund excludes companies in the oil and gas production and exploration sector, as defined by the GICS sub-industry. We stand by the fact that all our current investments are consistent with this position.
We’re not an ethically based or accredited as a sustainable investor which means we don’t apply negative or positive screens based on ideology. Rather, responsible investment is engrained in everything we do.
We transparently provide our members with information about why and how we invest and protect their retirement savings. We also encourage all super fund members to contact their fund directly if they have questions about where their money is invested and why.
The independent body, Market Forces, recently ranked NGS Super’s default investment option as the number one fund least exposed to their index of companies labelled as ‘Climate Wreckers’. Our carbon intensity fell by nearly 20% between 30 June 2021 and 30 June 2022 in the NGS Diversified MySuper portfolio and we’ve divested $191 million AUD from carbon-intensive companies/industries since the start of our decarbonisation process, including our 2022 divestment from undiversified oil and gas producers including Santos and Woodside.
To achieve a carbon neutral portfolio, we’re focused on carbon reduction and investing in carbon positive assets or companies. We’re invested in areas such as clean energy infrastructure (wind and solar projects), storage infrastructure and grid technology.
We assess individual companies on a case-by-case basis to identify structural winners that are transitioning their business models and those that continue to produce fossil fuels and pose significant stranded asset risk. Stranded asset risk involves assets which are unable to meet their original economic return. This includes the offshore oil majors such as Exxon and Chevron, which we’re currently evaluating.
We recognise that the world still has a need for oil and gas, but we also recognise that companies operating in this space must have a plan to transition into renewables to be considered a responsible investment. BP and Shell and Total Energies are investing in renewable energy projects such as wind and solar.
We make decisions to divest in a company or industry such as tobacco, based on whether we believe their future revenue will be impaired, that is whether they are likely to become a stranded asset, in investment terms, impairment means a permanent reduction in the value of a company asset. Our consideration of the gambling sector follows the same logic.
Our members’ financial interests will always be the first consideration throughout our decarbonisation journey. NGS takes a continuous improvement approach in responsible investment. That's why our Investments team works hard to create a robust portfolio that integrates responsible investments and achieves strong returns over the long term.
Below is an overview of the inaccurate and misleading statements which appeared in the ABC's story.
