Will Prof. Flannery Make Up The Shortfall?

AT CATALLAXY, Judith Sloan expands on a 7.30 report about red-ink woes at UniSuper, the $30 billion fund intended to make sure academics (and, sadly, broom-wielding lesser mortals) remain as comfortable and inactive in retirement as were most at the lectern. While this is not a concern for the Professor, who invested in a venture blessed by solid cash flow and ever-tumescent demand, some of the entries in Unisuper's portfolio cannot be doing well. Put this down to a tendency, ever present in common room and on campus, for putting principle above principal.

Take this statement of the fund's green inclinations, for example. Or, better yet, click on that page's link to the funds Climate Change Position Statement, where you will find the following:

* where possible and appropriate, incorporate climate change considerations across all asset classes and internally assess investment-related climate change risks and opportunities.

and this one

 * continue to support and encourage investee companies (both listed and unlisted), through a range of methods, to actively manage their carbon emissions (including target setting, measurement, monitoring, reporting and external verification) and publicly disclose their performance.

To be fair, it would appear UniSuper's crisis has more to do with the fund's structure and absence of an employer guarantee than to greenmania.

Still, it is rather appealing to imagine the likes of Stephan Loondowsky huddled beneath a bridge and pondering whether to burn his worthless UniSuper statements or take the more sustainable option and stuff them for warmth and comfort inside his ragged trousers.

For those who did nothing to inspire this madness and will also be screwed there can be nothing but sympathy.

OUCH! UPDATE: Talieh Williams, head of Governance and Sustainable Investment at UniSuper, has the sort of CV that she suggests she may well be the smartest person in any passively heated candle-lit room. Monash, RMIT and Harvard Business School -- it is a most impressive pedigree, and those sheepskins go very nicely with what has been a flourishing, green-themed career that has included stops at Shell and Ernst & Young.

She does seem to have at least one blind spot, however, especially when it comes to appreciating that sustainability can bring much pain.

GONE-TO-WATER UPDATE: UniSuper has a 26% interest in AquaSure, operator of the gold-plated desalination plant Victoria does not need and cannot afford. The fund's $200 million investment looks like a solid proposition as "revenue streams on this project feature an availability based PPP [public private partnership] payment from the Victorian State Government, so equity investors effectively do not bear demand risk."

However, there is this:  "The payment stream is also subject to the ability of the design and construction, and facilities management contractors to deliver and maintain the asset."

So far, with the (deliciously) rain-delayed project running horrendously late and over budget, the design and construction team's "ability" has yet to be demonstrated.

GOLF UPDATE: There isn't one. Back after 18 holes.