Not for profit superannuation fund NGS is deepening its commitment to ESG investment practices by divesting in all oil and gas related stocks.
Industry super fund NGS Super has expanded investment restrictions on fossil fuel producers to include companies who are simply in the oil and gas production and exploration sector.
The super fund announced it has divested around $191 million and redistributed to other holdings within the fund’s equities portfolio.
Ben Squires, chief investment officer at NGS Super said the fund currently has $13 billion in funds under management.
“Companies whose revenue relies on further oil and gas exploration and production are at risk of becoming stranded assets as the world decarbonises, especially if they are solely focused on upstream oil and gas production,” Squires said.
“By divesting these companies, we expect to generate higher returns from allocating capital elsewhere.”
The sustainability-focused super fund with roots as an industry fund for teachers in independent schools, said its initial baseline measurement was ‘scope 1’ and ‘scope 2’ emissions of the Diversified (MySuper) investment option.
Scope one represents direct emissions from a company or business because of their operations and scope two, indirect emissions from the generation of purchased energy from a utility provider.
Until the 4 August announcement, its divestment rules applied only to those investments with more than 30 per cent of revenue from distribution, power generation, or extraction of thermal coal.