A number of sustainable investment options have been found to invest in companies with fossil fuel expansion plans.
Some of Australia’s largest super funds have been accused of greenwashing due to their investment in fossil fuel expansion via options labelled as ‘sustainable’.
Eight ‘sustainable’ or ‘socially responsible’ super fund products were found to have investments in companies expanding the fossil fuel sector, according to analysis conducted by Market Forces.
“Our analysis reveals these so-called ‘sustainable’ options aren’t living up to what they claim to be, but are merely exercises in greenwashing,” said Market Forces campaigner Brett Morgan.
In June, ASIC issued an information sheet targeted at superannuation and managed funds on how to avoid greenwashing when offering or promoting sustainability-related products.
“Labels or headline statements about a product’s green credentials should not be misleading. Being ‘true to label’ is not a nice-to-have, it’s a regulatory must-have,” ASIC deputy chair Karen Chester said at the time.
“It’s also a must-have for investor confidence and trust. And a must-have for both fair and efficient market outcomes here. Misdirected investment here will inevitably be at great economic cost.”
For its analysis, Market Forces compared the holdings of sustainable super options with companies listed in its Climate Wreckers Index, which is made up of 180 listed companies that it says have the largest fossil fuel expansion plans.
“When challenged over their investments in climate wrecking fossil fuel companies, super funds often point members to their ‘sustainable’ investment options, yet some of these products are clearly failing to live up to their labels, as they invest in companies expanding the fossil fuel industry,” he said.
“Discovering your retirement savings are invested in companies opening up new coal, oil and gas mines would be a big blow to members of ‘sustainable’ super fund options.”
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
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