AustralianSuper climate change policy fails to rule out thermal coal investment

AustralianSuper’s new climate change policy does nothing to ensure the fund will do anything to reduce the climate impacts of its investment portfolio in the short-term, according to Market Forces. 

The advocacy group said while there were some positive elements to the new policy it did not categorically rule out coal mining or coal power investments, set a path to exiting the oil and gas sector, no set short and medium-term decarbonisation targets. 

The new policy included a commitment to net zero carbon emissions by 2050 in the investment portfolio and noted its carbon intensity of Australian and international shares portfolio fell by 44% from 2013 to 2019.  

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However, Market Forces said the policy was missing: 

  • A concrete exclusion ruling out any (passive or active) investments in thermal coal mining and coal power companies, now and in the future; 
  • A plan to exit investments in other fossil fuel sectors; and 
  • Short and medium-term decarbonisation targets 

Market Forces said for AustralianSuper to meet its net zero carbon emissions goal it would require a range of actions, most importantly shifting investments away from high emissions companies and industries, and instead invest in low and zero-carbon alternatives. 

“However, without any interim emission reduction targets or immediate commitments to divest from the most emissions-intensive companies, there is nothing to ensure AustralianSuper will do anything to reduce the climate impacts of its investment portfolio in the short-term,” it said. 

“Further, the emissions intensity reductions achieved by AustralianSuper so far don’t take into account the emissions caused when investee companies’ products are used, as these downstream ‘scope three’ emissions are not included in AustralianSuper’s portfolio emissions calculations.  

“As an example, gas producer Woodside’s scope three emissions are almost 10 times as large as its operational emissions (scope one and two), but these are not included in AustralianSuper’s portfolio emissions.” 

It noted that the policy failed to rule out any investment in thermal coal, the most emissions-intensive fossil fuel.  

“While it’s good to know the fund has no current investments in companies like Whitehaven Coal, without a clear exclusion policy, there is nothing to stop the fund investing again in the future,” Market Forces said. 

“For AustralianSuper to take its rightful place as a leader on climate action, it should not only be excluding coal mining and coal power investments, but also plotting a clear path to exit the oil and gas sectors as well.  

“This could be done by setting interim portfolio emissions targets that include scope the emissions, or are complemented by targets to reduce investment exposure to fossil fuel reserves. Alternatively, AustralianSuper could follow the Suncorp example and announce a staged plan to reduce investments in oil and gas production over time, starting with the most emissions-intensive.” 

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