UniSuper, one of Australia's largest pension funds, has reported that investments across its A$115 billion ($77 billion) portfolio are more harmful to the environment than previously estimated.
The fund has published a revised version of its climate risk report, showing higher carbon footprints across all investment strategies used by more than 600,000 members for their retirement savings. UniSuper had previously removed the disclosures from an earlier version of the report after finding some errors, Bloomberg reported in March.
Ernst & Young was engaged to review the fund's emission data, according to the updated report. As part of the review, the consulting firm interviewed UniSuper staff and checked the accuracy of calculations, the document shows.
A spokesman for UniSuper confirmed an updated report was published last month, but declined to comment on the revisions or why they were higher.
Australia's A$3.4 trillion pension industry is under mounting pressure to stand up environmental claims, especially as it continues to be a big investor in fossil fuel companies. The Australian Securities and Investments Commission is running a ruler over climate claims of financial institutions, amid a growing concern that some may be making statements that could mislead retail investors.
UniSuper's new report revises the carbon intensity levels of its balanced portfolio, the default option for members, to 4.29 tons of emissions per A$100,000 invested from 3.69 tons in the original version published in September. When the investments are grouped by asset classes, one of the biggest revisions is in the international equities portfolio where levels almost doubled to 2.92 tons per A$100,000 from 1.56 tons.
The calculations include only Scope 1 and 2 emissions, based on the portion of the portfolio's listed equities and corporate bonds that provided carbon data as at June 30, 2022, according to the new report.
"One of the key limitations in calculating a carbon footprint is the completeness of available emissions data," UniSuper said in the report. "Measuring and estimating emissions accurately can be challenging." The fund added that it "strongly encouraged" the mandatory adoption of climate-related financial disclosures to ensure consistency across companies.
Another Australian pension fund, Active Super, had also removed its responsible investment report from its website, Bloomberg reported in March. The fund is undertaking a review of ESG-related materials, a spokesman said in an emailed statement this week.
