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IFM Investors records 7.9% drop in CO2 emissions for Australian portfolio

The Australian fund manager continues to report publicly on emissions of its Australian assets and said it is making solid progress towards emissions reduction targets.

IFM Investors has revealed a reduction of 7.9 percent in the carbon emissions of assets in its Australian infrastructure portfolio.

The firm revealed that the total footprint of its Australian infrastructure assets stood at 1,007,926 tonnes of carbon emissions in the year to 30 June 2019, including 59,254 tonnes of Scope 1 emissions and 948,672 tonnes of Scope 2 emissions.

IFM Investors’ financed CO2 emissions, the proportion of emissions from each asset that are representative of an investor’s ownership stake and the figure it measures when calculating the percentage reduction, stood at 273,514 tonnes.

Financed carbon emissions for the portfolio were 297,009 tonnes at the end of June 2018, while they stood at 540,702 tonnes at the end of June 2017, the first year IFM published figures. The 45 percent reduction between 2017 and 2018 was largely attributable to the divestment of Ecogen Energy, an asset comprising two gas-fired power stations, in March 2018.

IFM noted that the value of its assets has grown while emissions have been reduced, with the value of its Australian portfolio increasing to A$11.4 billion ($7.4 billion; €6.9 billion) from A$10.4 billion in 2018, a rise of 9.5 percent. This in turn meant that emissions intensity per A$1 million of investment fell by 16.1 percent, from 28.6 to 24.0

Speaking to Infrastructure Investor, IFM Investors head of responsible investing Chris Newton described the figures as “fantastic”.

“Our investments are on the journey to keep reducing emissions, and it’s fantastic to see them continue to push that work. This will take a long time, so to get these reductions in a 12-18-month period has been really impressive. We expect that progression to continue and for assets to hit their targets,” he said.

The firm has set a range of targets for seven of the assets in its Australian Infrastructure Fund, including New South Wales electricity distributor Ausgrid, Melbourne Airport, Brisbane Airport, Port of Brisbane, NSW Ports, NT Airports and Melbourne’s Southern Cross Station.

It set different targets for each asset, with the level of reduction targeted varying depending on the asset’s sector and location. The targets range from a reduction of 8-25 percent by 2024 to 17-100 percent by 2030, with 2017 as the baseline year.

Ausgrid, for example, is aiming to lower emissions by 8 percent by the end of fiscal year 2024 and 17 percent by FY30, while NT Airports, the company that operates Darwin International Airport, Alice Springs Airport and the Tennant Creek Airport, has the highest target, aiming to reduce emissions by 100 percent by FY30.

IFM said that initiatives in the last 12 months have included the largest single rooftop solar panel installation at an Australian airport at Brisbane Airport, with 6,545 panels accounting for 18 percent of the asset’s direct electricity consumption.

Newton said that the coronavirus pandemic presented new challenges for investors when assessing ESG performance, including when it comes to assessing carbon emissions.

“One of the key things for us and all investors committed to this is staying the course and not taking this break in economic activity as an excuse not to continue,” he said.

“One challenge is that in FY20, new emissions will clearly have dropped quite a lot purely due to economic conditions, so we’ll need to shift how we’re measuring those from a base total amount of tonnes of CO2, to perhaps looking at things around the economic activity produced. This might be emissions per passenger vehicle, or per passenger, depending on the asset type.

“We might need to adjust how we’re measuring performance during this period so we can continue to pursue efficient reductions, but over the long run we’re still focused on the total tonnes emitted.”

IFM Investors had more than A$156 billion of assets under management as of 31 March 2020.