One of Australia's biggest industry superannuation funds plans to sell down its investments in thermal coal miners in a bid to protect its members from the financial impact of climate change.
First State Super, which has more than $120 billion under management, on Thursday updated its plans to support a low carbon emissions economy.
It argues climate change poses one of the most significant risks to the retirements savings of Australians.
Super funds must act now to ensure they can provide members with a better financial future, First State Super CEO Deanne Stewart said in a statement.
"We have seen over the past 10 years significant volatility in the value of thermal coal miners, and increasingly insurance companies are signally their intent to exit this sector in response to medium-term climate-related risk," she said.
"Divestment from thermal coal mining is an important first step."
Under its plan, First State will divest from businesses that derive more than 10 per cent of revenue from thermal coal mining from October this year.
It also wants to cut its listed equities investments to meet an internal target to cut greenhouse gas emissions by at least 30 per cent by 2023.
At the same time, First State said it would agitate for an economy-wide 45 per cent reduction in emissions by 2030.
"It is essential that as a responsible owner super funds set strong, ambitious and transparent targets to deliver the kind of action we need now to prepare for a more prosperous and sustainable future," Ms Stewart said.
First State is a not-for-profit fund set up to provide retirement funds management services for government employees. It's now open to everyone.