Australia’s 15 largest superannuation funds have more than $25 billion invested in companies that are expanding their coal, oil and gas production and the organisations have been criticised for setting up young Aussies for a worse climate future.
Nearly a fifth of this amount – $4.66 billion – is invested in just three big polluting companies: Woodside, Chevron and Santos, the new analysis from the Australian Conservation Foundation (ACF) found.
Funds AustralianSuper, Unisuper, Hesta and Australian Retirement Trust are the biggest investors in companies putting money into fossil fuel expansion, it added.
“Australia’s biggest super funds have enormous influence in facilitating Australia’s energy transformation – or blocking it,” said ACF’s corporate campaigner Jonathan Moylan.
“Super funds are making decisions today about the kind of climate young Australians will live in when they reach retirement age.
“By the choices they make about how they invest our retirements savings, super funds can transform Australia from the world’s largest exporter of climate pollution to a country that manufactures low or zero emissions materials here with our abundant wind and sunshine.”
All 15 funds still invest in Woodside, despite the company’s Western Australian Scarborough gas project plan worth $16.5 billion, destined to create climate emissions through to 2055.
The ACF has called on the super funds to divest from all coal, gas and oil companies expanding fossil fuel production or use, set clear interim targets to phase out of fossil fuels and use their influence to push companies they invested in to cut emissions.
“Australia’s superannuation funds could be a leader on climate change in line with their commitments to reach net zero emissions and keep global temperature rise below 2 degrees,” the report noted.
The call for action to tackle climate change goals in investment circles has become louder in recent times.
Only three funds, including the Australian Retirement Trust, remained invested in US energy giant Chevron.
“Woodside is not currently excluded from our investment portfolio as it contributes to members’ returns helping to deliver on our overall investment objectives and our legislated duty to act in members’ best financial interests,” Australian Retirement Trust told members as part of a series of questions last month.
“Over the past year, we have engaged with Woodside on a number of occasions in relation to climate change. We are seeking to be more focused in our company engagements and set objectives to track and monitor outcomes.”
Yet, the Woodside board potentially faces a second climate protest vote at its annual general meeting later this month, when three longstanding directors are up for re-election.
“Australian Retirement Trust recently told its members it was speaking with Woodside about its climate change plan and had the option to vote against company directors or vote down the remuneration report,” Mr Moylan said.
“Vision Super has indicated it will vote against key directors at the company’s upcoming AGM on 28 April and Hesta has already put Woodside on notice that it will take action if the company doesn’t align its company strategy with the Paris Agreement.
“A growing number of Australians don’t want their retirement savings locking in greenhouse emissions with new projects when they could be building clean energy infrastructure for the 21st century and will be paying attention to how Australian Retirement Trust votes on director and remuneration votes at Woodside’s AGM.”
An AustralianSuper spokesman said its purpose is to help members to achieve their best financial position in retirement.
“When investing in a company we consider how it will deliver long-term value for members in a changing macro-economic and geopolitical environment and its alignment to the fund’s net zero by 2050 commitment,” he said.
“As an active and responsible owner, we actively engage with the companies we invest in to understand how the company plans to transition its operations to deliver long-term value in a low-carbon economy.
“Gas is an important transition fuel in supporting the global community to move towards a low-carbon economy. We believe those companies who actively manage this transition will continue to perform well and deliver long-term value for members.”
Last year, UniSuper chief investment officer John Pearce said moving their investments out of companies such as oil and gas major Santos “would not solve any problems” and their holding was too small to “engage” with the companies.
“There are no shortage of buyers for Santos; whether it’s Santos or Woodside, all we would be doing is transferring the stock to someone else who would be very happy to take it off our hands,” he said.
News.com.au has reached out to Hesta for comment.