Australian super funds sink $25 billion into coal, oil and gas

Australia’s 15 largest super funds have invested a total of more than $25 billion into new and expanding coal, oil and gas projects, according to an analysis from The Australian Conservation Foundation.

One of the biggest offenders, AustralianSuper, had almost $10 billion invested in fossil fuel operations at the end of December 2022, the report finds.

Australians with their money in the fund’s balanced option sank almost $2 billion into Woodside Energy, owner of the Scarborough and Pluto gas projects, according to AustralianSuper’s portfolio disclosure.

Woodside is responsible for 16 per cent of emissions from the country’s 12 biggest polluters since 2016, according to Climate Council data.

The ACF says that all 15 of the super funds are invested in Woodside, which merged with BHP’s petroleum operations in June last year.

Only three, however – Australian Retirement Trust, Commonwealth Super and OnePath – still have ‘balanced’ option funds in Chevron.

“Australia’s biggest super funds have enormous influence in facilitating Australia’s energy transformation, or blocking it,” said ACF’s corporate campaigner Jonathan Moylan.

“By the choices they make about how they invest our retirement savings, super funds can transform Australia from the world’s largest exporter of climate pollution to a country that manufactures low or zero emissions materials here with our abundant wind and sunshine.”

Super fund sell down

The biggest super funds have been selling down some stakes in oil and gas companies, however.

AustralianSuper, UniSuper and HESTA led the selling in Santos last year.  Aware, Colonial First State and Hostplus accumulated the stock, according to Market Forces.

UniSuper, HESTA and CBus sold off Woodside.

But AustralianSuper’s stake in the now-top 10 global oil and gas company grew by 14 times, a figure that Market Forces says can only be partially explained by an existing stake in BHP and points to a backflip by the super fund on it stance with this company.

Delete delete delete

The report comes less than a month after many of the super funds on the ACF list began swiftly scrubbing out references to climate commitments, after the Australian Securities and Investments Commission (ASIC) began cracking down on greenwashing.

ASIC took retail super fund Mercer to court over its claims that its Sustainable Plus investment was solely made up of green and ethical companies. ASIC alleges the fund was in fact invested in nearly 50 fossil fuel, gambling and alcohol companies.

AustralianSuper deleted its climate report, a Net Zero by 2050 fact sheet, and made major changes to the climate change ‘how we invest’ page on its website.

UniSuper deleted 16 pages from a climate risk report and Active Super deleted its entire Responsible Investment Report.

Retail Employees Superannuation Trust (REST), HESTA and UniSuper have already faced lawsuits about their sustainability claims in the past, although none yet from a regulator, said lawyers from Gilbert+Tobin said in a note.

Of the 15 funds on the ACF list, four now have no commitments to net zero by 2050, according to Market Forces’ Climate Wreckers index. Commonwealth Super, Equip Super and MLC deleted their 2050 Net Zero targets; OnePath never signed up to the commitment.

Climate crusade led by proxies, not super funds

Super funds claim they are changing companies from within, but they are not the ones publicly calling for change at Woodside Energy.

Woodside is facing an investor revolt next week at its general meeting, with investors urged by two proxy funds to vote against director Ian Macfarlane’s re-election.

CGI Glass wants investors to vote against Macfarlane only and the remuneration report to protest the company’s woeful climate commitments, while Institutional Shareholder Services recommends investors vote against re-election of Macfarlane, Larry Archibald and Goh Swee Chen but not the remuneration report.

“Australian Retirement Trust recently told its members it was speaking with Woodside about its climate change plan and had the option to vote against company directors or vote down the remuneration report,” Moylan said.

“Vision Super has indicated it will vote against key directors at the company’s upcoming AGM on 28 April and HESTA has already put Woodside on notice that it will take action if the company doesn’t align its company strategy with the Paris Agreement.”