Scientific Beta

InvestorDaily: "Meanwhile, managing track error has been raised as a concern for the superannuation industry as a whole. Namely, recent data from global index provider Scientific Beta suggested performance testing imposes tracking error targets that tether funds to high-emitting companies, inadvertently restricting fund investment behaviour to continue to fund high-carbon emitters regardless of their ESG performance."

InvestorDaily 02/04/2024

"(...) Meanwhile, managing track error has been raised as a concern for the superannuation industry as a whole. Namely, recent data from global index provider Scientific Beta suggested performance testing imposes tracking error targets that tether funds to high-emitting companies, inadvertently restricting fund investment behaviour to continue to fund high-carbon emitters regardless of their ESG performance. Unlike the low-carbon benchmarks readily available in Europe, the absence of a Your Future, Your Super-compliant low-carbon benchmarks in Australia leaves super funds with few viable options, Scientific Beta stated. “Tracking error constraints on super funds make it difficult to act [and] limits how much they can do in terms of financing climate solutions,” Erik Christiansen, head of investment solutions for Scientific Beta, told InvestorDaily. “If they decide to focus on or be overweight companies that provide climate solutions, that could lead to tracking error.” (...)"