Australia, 3 March, 2021 – Consistent with Mercer’s global goal to place sustainability at the centre of its investment approach, Mercer Australia has committed to a target of net-zero absolute carbon emissions by 2050 for its Australian Funds and the Mercer-managed investment options within Mercer Superi. This represents a combined $36.4 billion AUD in assets under management as at 31 December 2020. To achieve this, Mercer expects to reduce portfolio carbon emissions by 45 per cent from 2020 baseline levels by 2030ii.
The commitment aligns with targeting a 1.5 degree Celsius limit on global temperature increases and the Paris Agreement’s ambitions.
Kylie Willment, Chief Investment Officer of Mercer Pacific, said the commitment is based on the belief that it is in the best financial interests of superannuation members and investment clients.
“Robust analysis has informed our view that this decision is in the best financial interests of our members and clients to invest for a 1.5 degree scenario. What’s more, the demand from members and clients for a rigorous and measureable approach to climate change is greater than ever,” Ms Willment said.
“The target builds upon our well-established climate change beliefs and scenario analysis over multiple years and is supported by a Climate Transition Plan. The preparations we have completed across asset classes gives us confidence that we can reduce emissions in our funds while delivering on our investment objectives.
“As leaders in sustainable investment across both research and advice, we’re excited to be taking these significant steps, in Australia first, as part of our global roadmap to supporting clients to achieve net-zero. This is the first of a number of initiatives to be announced globally by Mercer,” she said.
Under Mercer’s Climate Transition Plan, the firm will be working closely with its appointed investment managers to identify and manage a staged emissions reduction plan, oversee portfolio allocations to climate solutions, and steward an increase in transition capacity across the funds.
“The greatest change is expected in equity and real asset portfolios, where members invested in these growth assets typically have timeframes aligned to carbon neutrality goals over the long-term,” said Ms Willment.
Progress on absolute emissions and carbon intensity reductions will be monitored annually – together with analysis on transition capacity and allocation to ‘green’ solutions – using the Analytics for Climate Transition (ACT) tool, launched by Mercer in November 2020.
“Carbon reduction targets are much like performance targets. They help to set expectations and give us goalposts to track and measure our progress. We’re proud to be committing to net-zero by 2050, and we look forward to working with our appointed investment managers towards a 1.5 degree scenario.
“And, we’re excited to be taking our clients and members on this important journey,” Ms Willment said.
i Defined as absolute carbon emissions, per $M of FUM and Scope 1&2 for the Mercer Funds in aggregate and for each diversified fund.
ii Per dollar of assets under management.
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s more than 25,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a business of Marsh & McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 76,000 colleagues and annual revenue of USD $17 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.com.au. Follow Mercer on Twitter or LinkedIn.
Mercer Investments (Australia) Limited (MIAL), ABN 66 008 612 397, AFSL #244385, is the responsible entity and trustee of the Mercer Funds. Mercer Superannuation (Australia) Limited (MSAL), ABN 79 004 717 513, AFSL #235906, is the trustee for the MST.
This does not constitute an offer or a solicitation of an offer to buy or sell securities, commodities and/or any other financial instruments or products or constitute a solicitation on behalf of any of the investment managers, their affiliates, products or strategies that Mercer may evaluate or recommend.
This does not contain investment advice. No investment decision should be made based on this information without first obtaining appropriate professional advice and considering your circumstances.
Risk warnings: The value of your investments can go down as well as up, and you may not get back the amount you have invested. Investments denominated in a foreign currency will fluctuate with the value of the currency. Certain investments carry additional risks that should be considered before choosing an investment manager or making an investment decision.