UniSuper climate plan has ‘loopholes’: Market Forces

UniSuper’s climate plan leaves a “loophole big enough for an oil tanker to sail through”, according to Market Forces.

UniSuper recently updated its climate change policy which included three approaches to managing climate risks via investing, engaging, and collaboration, and detailed short and medium-term targets to support its longer-term objectives.

However, Market Forces said it fell short of its promise to prove itself as an industry leader on climate change.

The organisation’s asset management campaigner, Will van de Pol, pointed to the industry super fund’s commitment that said it would ensure its investment portfolio reached net zero carbon emissions by 2050 and would contribute to a 45% reduction in Australia’s emissions by 2030, including targeting an absolute reduction in its portfolio emissions “where practical”.

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“Frankly, UniSuper’s 2030 emissions plan leaves a loophole big enough for an oil tanker to sail through,” he said.

Under its investing approach the industry super fund said it would apply a shadow carbon price to material investments it expected to hold for the medium to long term.

Market Forces noted it did not provide details of the carbon price that would be used, or how and when it would be reviewed and increased over time.

While the fund also said it would divest from companies that derived over 10% of its revenue from thermal coal, Market Forces said UniSuper provided no commitments, strategies, or targets to drop other fossil fuel investments. This included major Australian oil and gas producers Woodside, Santos, Oil Search and Origin which it said were demonstrably consistent with the failure of the Paris Agreement.

Market Forces said it was also “confused” by the super fund’s commitment that 100% of its material, active, in-house Australian investment companies would have Paris-aligned operational commitments by the end of 2021.

“Given many fossil fuel producers UniSuper invests in have expansion plans that are totally inconsistent with the Paris climate goals, the fund must be anticipating these companies will announce plans to wind down production in line with the Paris goals, or else the fund is heralding significant divestments in the coming year,” van de Pol said.