According to a new Market Forces analysis, the sovereign wealth fund now has more than $1 billion invested in Woodside Energy, Santos, and Whitehaven Coal, having increased its stake in all three of “Australia’s worst climate wreckers” in the six months to 30 June.
The analysis shows that the Future Fund now owns more than 1 per cent of the outstanding shares in each of Woodside, Santos, and Whitehaven, making it a top 10 shareholder in all three companies.
“The analysis found the fund is allocating a larger proportion of its Australian share investments to Woodside Energy, Santos, and Whitehaven Coal than their relative size in the market,” Brett Morgan, superannuation funds analyst and campaigner at Market Forces, said in a statement on Thursday.
“Analysis of the Future Fund’s voting disclosures also reveals it has failed to support a single climate-related shareholder proposal at the annual general meetings of Woodside, Santos, and Whitehaven since 2021,” he said.
In fact, according to Morgan, the fund’s voting activity has aligned with nearly all of the recommendations put forward by the boards of these three companies over that time frame, with the exception of votes against Whitehaven Coal’s remuneration plan in 2021–23 and a vote against Woodside’s climate transition plan in 2024.
The sovereign wealth fund’s backing of these three companies starkly contradicts its earlier statements acknowledging climate risk as a significant financial threat, the activist group said.
In its 2022–23 annual report, the fund acknowledged climate risk as a “material financial risk” and outlined some of the steps it is taking to address it, including considering how votes are cast at portfolio company annual general meetings (AGMs).
“We also review climate risk during due diligence for specific investments, monitor how our investment managers are addressing climate risk where appropriate to their strategies, engage with the assets and companies we invest in, and integrate climate-related considerations into our proxy voting activities,” the fund outlined in the report.
Yet, Market Forces said the fund’s voting record suggests it is not adequately considering climate change in its voting decisions.
According to the activist group, back in 2022, the Future Fund supported Woodside’s climate transition plan and then opted to vote against it in 2024 in a move the group called “less than the bare minimum”.
The Future Fund now faces mounting pressure to leverage its influence and halt fossil fuel expansion, with its stance at next week’s Whitehaven Coal AGM seen as a critical test of its commitment to managing climate risk and protecting its portfolio from companies ignoring investor concerns.
“The Future Fund must act in the best interests of a safer and more secure Australia by ending the fossil fuel expansion plans of portfolio companies and divesting where this fails,” Morgan said.
“We urge the Future Fund to vote against Whitehaven’s coal growth-focused remuneration plan and the directors responsible for it at the company’s annual general meeting next week.”
Responding to allegations made by Market Forces, a spokesperson for the Future Fund told InvestorDaily: “Like other large Australian investors, we invest across the economy in line with the ASX 200 index, including in companies in the traditional energy sector.
“Through our infrastructure program we are also one of the largest investors in renewable energy in Australia. Good governance and climate risk management are important parts of our investment program.
“Our votes against Woodside’s Climate Transition Plan and Whitehaven’s recent remuneration reports are on the public record and reflect our robust and thoughtful approach. Alongside our voting activity is the extensive engagement we undertake with ASX companies with climate one of the top themes raised with companies through the last financial year.”
