Growth assets outperform, weak Australian dollar boosts unhedged asset returns

Key Insights

UN PRI and UN SDGs provide strong encouragement and a defined framework for investors to assess impacts of their investment decisions including carbon emissions and its impact on climate. Australia has the highest per capita greenhouse gas emissions in the OECD (26 tCO2e/person/year). The country has set its 2030 target to reduce its emissions by 26%-28% from 2005 levels. As an effort to achieve these targets, investors are actively seeking and demanding more advanced analytics on the impact of their investment decisions on carbon emissions and carbon risks. We demonstrate, using a data-driven approach, how advanced analytics can be used to assess carbon risks in portfolios, assess key drivers of emissions from security, sector, country and decision perspectives These carbon and sustainability analytics can be integrated with financial and investment matrix to allow super fund trustees and investors to measure, monitor, benchmark their portfolio’s footprint to carbon. Data is now available to provide in-depth analysis across both equity and bond portfolios. UN PRI Initiative acts as a catalyst for global investors In 2006, the United Nations-supported Principles of Responsible Investment (UN PRI), an investor-led initiative, was launched to foster the development of a sustainable global financial system, which “will reward long-term, responsible investment and benefit the environment and society as a whole.” Since then, there have been 1961 signatories with a total asset under management of US$ 81.7 trillion as at April 2018. The preamble to UN PRI has stated: “We recognise that applying these Principles may better align investors with broader objectives of society”.

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