Shareholder activist group Australasian Centre for Corporate Responsibility (ACCR) has called out Australia’s largest superannuation funds for failing to step up on climate action, having analysed their votes as shareholders for the last three years.
The ACCR’s new report compared the publicly available proxy voting records of 50 of the largest super funds in Australia, looking at 135 climate change-related shareholder proposals (26 being in Australia).
The shareholder proposals were examined in five countries: Australia, Canada, Norway, the UK and the US from 2017 to 2019.
In 2019, overall support for Australian shareholder proposals declined from an average of 19 per cent in 2018 to 14.8 per cent, which was consistent with the trend in the US (32.5 per cent in 2018, down to 25.1 per cent in 2019).
The five most supportive funds on all shareholders proposals globally were UniSuper, NGS Super, Cbus, Vision Super and HESTA, with more than 10 votes.
This was somewhat consistent with the five most supportive funds over the entire three-year period: Local Government Super, HESTA, Vision Super, Mercer and Macquarie.
Many funds’ support for Australian shareholder proposals were seen to decline significantly between 2018 and 2019. For example, Local Government Super had previously supported 100 per cent of proposals in 2018 with five out of five votes, but only supported 20 per cent in 2019 in its total of 10 votes.
Cbus, First State Super, Mercer and MTAA Super were said to back just one Australian shareholder proposal last year, out of their 11 votes each.
AustralianSuper was reported to have not backed a single Australian proposal in 2019 out of its 11 votes.
ACCR director of climate and environment Dan Gocher said the decline in support for climate change-related proposals in 2019 is the “exact opposite of what most members would expect their super funds to be doing in a time of climate crisis”.
“While Australian companies are seen as global laggards on climate, Australian super funds routinely vote against reasonable shareholder proposals that seek improved disclosure or set emissions targets,” Mr Gocher said.
“Many funds will excuse their poor voting records on the grounds that they have access to company boards and executives, who are supposedly ‘listening’. Unfortunately, far too many funds confuse access with influence, and are failing to escalate their engagement with the companies in which they are invested to match the urgency of taking action on climate change.
“The reluctance by super funds to escalate issues and create discomfort with companies must be overcome if we are to have any chance of addressing Australia’s appalling record on emissions.”
Most super funds were seen to support international shareholder proposals more often than local ones. The report pointed to UniSuper for declining to back any Australian proposals (16 votes) despite supporting nearly all international proposals (18 out of 19 votes).
Similarly, Macquarie supported one Australian shareholder proposal out of its 14 votes, but backed two-thirds of international bids (35 out of 53 votes).
‘Drip feeding information’
Ten of the 21 funds that disclosed their international voting record for 2019 do not hold at least one of the three oil majors BP, Chevron and ExxonMobil included in the analysis.
After the energy giants were hit with proposals in 2019, the ACCR has questioned if the remaining 11 funds are in fact trying to limit their exposure to fossil fuels.
But 16 of the 50 funds had failed to disclose any voting records over the three years. Only 11 funds were said to have complete transparency around voting.
Mr Gocher commented the lack of disclosure from super funds continues to be an ongoing concern.
“Far too many funds are treating their members and the general public with contempt, by drip feeding them information,” he said.
“The larger the superannuation industry gets, the greater the responsibility funds have. Disclosure and transparency [matter].”
Unisuper on the other hand, was said to significantly improve its disclosure in 2019.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].