57: HESTA's Daniela Jaramillo – Energy Transition, Social Stranded Assets and Systemic Risk

[i3] Institutional Investment Podcast

In this podcast, we speak with Daniela Jaramillo, Senior Responsible Investment Adviser with pension fund HESTA about the risk of the transition to renewable energy and a low carbon economy, whether to divest or to continue engagement and socially stranded assets. This podcast is brought to you in partnership with Trillium Asset Management. Please enjoy the show. Overview of Podcast with Daniela Jaramillo: 1:00 Founding a non-profit and moving to London 4:35 What practical steps are you taking to reduce carbon emissions? 5:00 We don’t want to just do carbon accounting. We want to make a real difference in the real world 8:30 Most Australian businesses have the ability to transition (to a low carbon economy), but they need the will and sometimes encouragement of public policy 9:30 Thermal coal divestments and stranded assets 11:40 Do ESG policies introduce unintended skews? Value companies are more asset heavy than growth stocks. 12:30 It is possible to have value in portfolios without deviating too much from benchmarks. 14:00 We are interested in reducing emissions in the real world, not just in our portfolio. So if we simply divested, then that risk is still out there. 17:30 The use of shareholder resolutions is changing in Australia and they are sometimes seen as a way of formally communicating a view to a company. 20:00 Social issues have become real risks for boards. They really need to be ahead of the next movement. Do I have a social stranded asset risk within my organisation? 22:50 Juukan Gorge and financial risk 26:20 Lack of standardisation in ESG ratings 29:00 Big data and ESG research 30:00 SDGs as a framework for solving big problems. 33:00 SDGs from an investment perspective. 34:00 Looking ahead: HEMA, climate transition plan and measurements 36:00 The pandemic and systemic risk