Super funds investing at least $25bn in fossil fuel expansion

New analysis has found Australia’s 15 largest superannuation funds are collectively investing at least $25 billion into opening new coal, oil, and gas projects despite making big commitments to tackling climate change.

According to recently released mandatory portfolio holdings, these investments represented 5 per cent of the entire holdings of the portfolios. 

National environmental organisation Australian Conservation Foundation (ACF) conducted the analysis by looking at the ‘balanced’ investment option for each super fund, which were investment strategies intended to balance risk and return by diversifying investments across a range of asset classes with the aim of achieving long-term growth while minimising risk. 

The fund with the most invested in new fossil fuels, by a big margin, was AustralianSuper at $9.89 billion.
This was followed by UniSuper ($3.1 billion), HESTA ($2.86 billion), and Australian Retirement Trust ($2.77 billion).

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Other funds with massive investments in such projects included Cbus ($2.14 billion), Hostplus ($2.11 billion), and Aware Super ($0.63 billion). 

ACF’s corporate campaigner, Jonathan Moylan, said: “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.

“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.”

ACF urged the 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 invest in to cut emissions.

“Burning coal, oil, and gas is the biggest cause of climate damage and the science is clear that we cannot expand the fossil fuel industry,” it stated.

The report noted nearly a fifth of this amount ($4.66 billion) was invested in just three companies, Woodside, Chevron, and Santos, which were believed to be responsible for a little less than half of the emissions from Australia’s biggest polluters since 2016. 

“Australia’s biggest super funds have enormous influence in facilitating Australia’s energy transformation — or blocking it,” said.

“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 retirement 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.”

Earlier this year, a Market Forces report found five of Australia's largest super funds could be exposing themselves to legal risk by failing to effectively engage with companies expanding fossil fuels. 

The Stewards of Climate Disaster report by Market Forces looked at AustralianSuper, Commonwealth Super Corporation, Australian Retirement Trust, Aware Super and AMP which had all committed publicly to manage climate risk.

However, they failed to demonstrate effective engagement strategies, including with Australia’s two biggest oil and gas producers, Santos and Woodside, Market Forces stated.