QSuper’s delay in understanding its carbon exposure is inconsistent with industry best practices and appears to be contrary to parts of the Superannuation Industry (Supervision) Act 1993 Cth (SIS Act), according to some of its members.
Two of the super fund’s members wrote to the fund to call on it to strengthen its policies to better manage climate change risk on behalf of its members.
The members called on QSuper’s chair, Don Luke, to:
- Explain why QSuper has delayed quantifying the fund’s carbon exposure;
- Commit to fully disclose all its equity holdings by 31 December 2021; and
- Clarify the steps QSuper is taking to achieve net zero emissions across its portfolio, including plans to divest from existing assets.
The letter written by Equity Generation Lawyer on behalf of the members asked why the fund believed the carbon calculating delay was consistent with the trustee’s duties.
“QSuper’s delay in understanding its exposure is inconsistent with industry best practice and appears contrary to subsections 52(6) and 52(8) of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act),” the letter said.
“It is our view that a prudent superannuation trustee should have already obtained this information in order to understand the nature of climate change risks to the fund.”
The law firm’s principal, David Barnden, who represented, Mark McVeigh in the landmark case against REST Super, said QSuper had not sufficiently analysed the fund’s climate risks contrary to its obligations as a super trustee.
“QSuper, like other superannuation funds, must act in members’ best interests. This means comprehensively understanding and managing the financial risks posed by climate change,” he said.
“QSuper’s delay in taking steps to understand climate change risk means the trustee may not have the information it needs to protect members from stranded assets in the current transition to a low carbon world. QSuper is well behind acceptable industry practice.”
The letter noted that the merger with Sunsuper could derail the fund’s commitment to release its carbon findings and approved strategies.
“Further, given the QSuper and Sunsuper merger is expected to proceed in September 2021, our clients are concerned that QSuper’s commitment to release its full findings and approved strategies related to its carbon exposure in December 2021 will be abandoned,” the letter said.
“Please advise whether the results of the carbon exposure exercise are expected to apply to the merged fund’s portfolio.”
Commenting, the Australian Conservation Foundation’s economic analyst and campaigner, May House, said: “Without a strategy to reduce emissions, QSuper’s statement that it is incorporating the goals of the Paris climate agreement lacks credibility.
“The latest science shows we need to slash our climate pollution over the next ten years and reach net zero by 2035 if we are to have any chance of limiting temperature rises to 1.5°C.”