Climate-Proofing SA Retirement Funds
Why retirement funds should divest from fossil fuels
Covid-19 has taught us the financial dangers of ignoring serious long-term risks highlighted by scientific experts.
It is the moral, fiduciary and practical responsibility of all asset owners such as retirement funds to urgently align portfolios with a rapid global transition to a low-carbon economy, if dangerous climate breakdown that threatens investors both physically and financially is to be averted.
In July/August 2019, in partnership with the UN-supported PRI, Fossil Free SA hosted workshops in Johannesburg and Cape Town on Climate-Proofing Retirement Funds events in July/August 2019. Here’s a brief summary of the events. The videos of these presentations and links to the presenter slides are below and on our YouTube channel.
We strongly encourage asset owners to set about creating a climate policy and pathway to divestment. Asset owners and asset managers are also strongly encouraged to join the Climate Action 100.
News
- July 2020: UK’s biggest pension fund divests from fossil fuels
- January 2020: How divestment stacks up against fossil fuels
Fiona Reynolds: The PRI and climate change
David Le Page of Fossil Free SA: Divestment in SA
Rose Hunter Fasken: Fiduciary duty and climate risk
Tracey Davies of Just Share: Fiduciary duty + climate change
Slides: Climate and PRI – Fiona Reynolds – UN PRI
Three key insights:
- The data and tools to address climate change through investment practices exist and just need to be applied.
- As much as trends and research are global, there is a lot of useful information available at the local level.
- The roles and responsibilities of each stakeholder group in the investment chain are critical to ensure that we address things effectively.
Three key action points:
- PRI will be setting up a local PRI signatory working group / committee to identify the ESG priorities of local investors and then catalyse projects with respect to these priorities.
- We will also be liaising with Asset Consultants regarding their role in the chain – to work toward removing blockages and leveraging influence for positive impact.
- We will continue to put pressure on the regulator and policymakers to work toward creation of a policy and regulatory environment conducive to RI.
- Retirement fund beneficiaries face physical, social and financial risks from being invested in fossil fuels
- There are huge hidden costs to sticking with the ‘carbon development paradigm’
- Divestment is ethical, prudent and practical
Slides: Fiduciary duty – Rose Hunter Fasken
In South Africa, our law supports strong action by institutional investors like pension funds to tackle climate change and drive inclusive economic prosperity. But pension funds have not yet risen to the challenge: they need to do much more, much faster.
Slides: Tracey Davies Just Share
In South Africa, our law supports strong action by institutional investors like pension funds to tackle climate change and drive inclusive economic prosperity. But pension funds have not yet risen to the challenge: they need to do much more, much faster.
Brent Cloete of DNA Economics: Transition risk
Lulek Dlamini: 1.5C warming: what business should consider
Diaan Janse van Rensburg: A proposed ESG fund
Coleen Vogel: Climate change and South Africa
Slides: Transition Risk – Brent Cloete DNA Economics
- Pension fund boards need to develop a transition risk policy
- Pension funds need to require asset managers to evaluate the transition risk within their existing portfolios, and provide sufficient information to funds to disclose it in line with the TCFD recommendations
- Pension funds need to require an approach to minimizing transition risk as part of their mandate to asset managers.
Slides: Climate Science Overview CT – Luleka Dlamini UCT
How climate change is affecting the world and South Africa, what will happen if we don’t cut fossil fuels emissions dramatically, and the changes that are already inevitable and unavoidable.
Slides: ESG Fund – Diaan Janse Van Rensburg – Efficient Group
Diaan outlines the prospects and possibilities for a South African ESG fund from a local financial services provider, the Efficient Group.
Slides: Climate Science Overview Jhb – Coleen Vogel Wits
How climate change is affecting the world and South Africa, what will happen if we don’t cut fossil fuels emissions dramatically, and the changes that are already inevitable and unavoidable.