Super funds ‘quietly’ reducing fossil fuel investments

Superannuation funds have “quietly” reduced their investments in fossil fuel companies over the last three years, according to research from environmental finance group Market Forces.

Its ‘Out of Line, Out of Time’ study found an estimated $2.5 billion in capital had been stripped from 23 Australian companies pursuing fossil fuel plans consistent with the failure of the Paris Agreement.

AustralianSuper had not had any active investments in Australian undiversified fossil fuel producers since 2020, which meant that, along with UniSuper, two of the seven biggest funds in the country had dropped fossil fuel producers.

All eight funds that disclosed investment in Woodside reduced exposure to the company by an average of approximately 50%, while six funds divested or committed to divest all exposure to Whitehaven Coal and New Hope Corporation.

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Whitehaven Coal and New Hope had been excluded or divested from 15 of the 30 largest super funds by assets under management.

Woodside had seen significant divestment from Australia’s top super funds, with six funds cutting exposure by at least 45%, and AustralianSuper by as much as 86%.

Santos saw a reduction by six super funds, but three funds increased their holding: Aware Super, Rest and Catholic Super.

Will van de Pol, Market Forces asset management campaigner, said despite claiming engagement was the best approach, super funds had given up on some fossil fuel companies.

“While it’s good news super fund members have less of their retirement savings invested in climate-wrecking coal, oil and gas companies, the transition is still far too slow,” van de Pol said.

“We’re still seeing almost every super fund in the country investing members’ money in companies pursuing massive expansion projects like Woodside’s Scarborough offshore gas project and Santos’ Narrabri coal seam gas project.

“Super funds must stop investing any of their members’ money in companies continuing to expand the fossil fuel industry, and publicly confirm these divestment decisions.”