Super funds are talking the talk on climate change – but are they walking the walk?
A report from ClimateWorks Australia in partnership with Monash has found that one-fifth of superannuation organisations studied have publicly stated their intention to achieve net-zero emissions in their portfolios by 2050 – a significant acceleration in efforts to address climate change risk.
“In 2018, superannuation funds owned almost half of Australia’s shares; by 2040, experts suggest they will own 60 per cent of ASX-listed equity,” said ClimateWorks CEO Anna Skarbek.
“That means the decisions they make matter enormously to the rapid decarbonisation of the Australian economy. By setting targets now, super funds can create the context in which their commitments become realisable. Their own actions can bolster expectations and spur the development of methods for sectoral decarbonisation.”
HESTA, Aware Super, Cbus, and UniSuper have all announced net-zero targets and indicated that they will engage with companies they invest with to disclose climate risks. But the lack of detail around these announcements has left activist group Market Forces cold – particularly those of UniSuper, which has an emissions plan with loopholes “big enough for an oil tanker to sail through”.
“The announcement is long on rhetoric and short on detail,” said Market Forces asset management campaigner Will van de Pol.
“While UniSuper acknowledges that more needs to be done, this policy creates more questions than answers. Without a clear plan to reduce exposure to all fossil fuel production and infrastructure to zero, UniSuper’s new climate policy fails to live up to the fund’s own promise of industry leadership on climate action.”
The fund has announced it will divest companies deriving more than 10 per cent of revenue from thermal coal mining, but provided no commitments or targets to drop other fossil fuel investments – which include “significant stakes” in major Australian oil and gas producers.
“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,” Mr van de Pol said.
Mr van de Pol noted that the plans fall far short of those of Suncorp, which recently announced that it would no longer underwrite new oil and gas exploration and production and will phase out investing in those activities by 2040.
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