Hesta sets stronger 2030 emissions reduction target
Hesta has announced a new target for 2030 emissions reductions across its portfolio and will strengthen its monitoring and engagement with key emissions-intensive companies.
As a result, companies such as AGL, Origin, Santos and Woodside were put on a watchlist under the fund’s engagement escalation framework, which was first introduced in 2021.
Hesta said it had lifted to 50% an interim target, set in 2020, to achieve a 33% reduction in normalised emissions by 2030 (against a 2020 baseline).
As part of its announcement of a new interim emission reduction target, HEST also said it had committed to investing by 2030 10% of its portfolio in climate solutions, such as renewable energy and sustainable property.
The new target was a result of “recognised developments in climate change since 2020”, which included an updated scientific research and the Australian Government’s increased commitment, Hesta chief executive, Debby Blakey, said.
“Hesta is committed to using active ownership with emissions-intensive companies to help drive down emissions in the portfolio and manage climate risk,” Blakey added.
Hesta said that in July it conducted its annual assessment of the climate change transition progress of companies that were key contributors to portfolio emissions and its assessment identified AGL, Origin, Santos and Woodside had faced significant decarbonisation challenges, requiring a major shift in their strategies to offer low carbon energy products.
Therefore, these companies were moved to a watchlist position according to the Fund’s engagement escalation framework.
In May this year, HESTA also voted against the climate plans of both Santos and Woodside, which were rejected by 37% and 49% of shareholders respectively, and wrote to the companies outlining their concerns.
Further to that, the fund said that as part of its escalation with AGL, in July, it took on the role of lead engager through Climate Action 100+, a global investor initiative to push the world’s largest corporate greenhouse gas emitters to take necessary action on climate change.
If an overseas company were to extract oil and gas and mine coal, what would HESTA do? A variation is shareholder activism stops coal mining in Australia, so places like China just shift to buying coal from other countries. Where we operate in a global market, targeting just operators in one country does little other than cause a loss of jobs and income for that country.