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Evidence in action – how our active engagement helps the transition to a lower-carbon world

As owners of the businesses where we invest your savings, we're proud to invest where we can influence how the business is managed.

16 Dec 2021

As long-term investors, we can stay committed to these companies, supporting their financial value to your savings and having real world impact, not just paper impact.

Our engagement program recognises that decarbonisation is a journey to be fair. It recognises the need for gas to play an interim role, while capital expenditure in storage, CCS, hydrogen and renewables capacity ramps up.

For example, gas produces 50% less carbon emissions transmissions than coal.  As such it is currently a necessary transition fuel in Australia and globally to help economies get to 2030+ while energy battery and distribution technology catches up. Our activity therefore supports well-governed LNG production and increasing capex on alternatives. 

Here are three examples of companies in our portfolios who are in the process of transitioning to lower-carbon operations – something we can support them to deliver by remaining engaged, thereby creating sustainable value in your portfolio, and beyond to improve real world outcomes.

German electricity

RWE AG is a German multinational energy company. The company scored poorly on emissions because of their historical reliance on fossil fuels, and its price was penalised by the market. It is understood renewables now comprise one-third of RWE's energy production. They have a plan to reduce emissions by 50% by 2030 and are committed to carbon neutrality by 2040.

Norwegian state oil

Equinor, previously Norwegian state oil, is another example. The company's plan is to be carbon neutral by 2030, and that's evidenced in their allocation of more than 25% of their total R&D budget to hydrogen and carbon capture and storage (CCS) technologies.

US Coal

WEC Energy is another example, a US company that is retiring old coal plants with a plan to achieve less than 10% revenue from coal by 2025. They're investing US$4 billion in solar, wind, battery storage technology, all critical to accelerating the transition to a new energy regime.

We can have a natural tendency to undervalue things that are complex –  and climate action, which is inseparable from the other 16 UN Sustainable Development Goals (SDGs), is very complex. To translate paper virtue to real world impact requires deep system appreciation, support of companies making deep decarbonisation changes, and early stage investments that lean into innovations capable of leapfrogging us forward. We've been doing these things for two decades, well before they became fashionable.

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