Despite the Australian government’s push towards net zero emissions by 2050, a recent report reveals that leading superannuation funds are significantly increasing their investments in oil, coal, and gas interests. From 2021 to December 2023, the top 30 retirement funds in Australia have nearly doubled their investment in traditional energy companies, reaching $39 billion, compared to $19 billion in 2021. In contrast, their investment in green energy solutions has decreased to $7.7 billion over the same period.
According to a report by advocacy group Market Forces, companies like Woodside Energy, Santos, and Whitehaven Coal are identified as Australia’s biggest emitters, contributing to 59 percent of projected emissions. Market Forces spokesperson Brett Morgan criticized large funds such as AustralianSuper, Australian Retirement Trust, and HESTA for not taking action to curb the harmful business practices of these companies.
Concerns about greenwashing, where companies make misleading claims about their environmental efforts, have led to increased scrutiny from regulatory bodies like the Australian Securities and Investments Commission (ASIC). In 2023, ASIC took legal action against Mercer, a super fund, for deceptive practices regarding the sustainability of its investments, resulting in Mercer paying $11.3 million in penalties.
To address the issue of climate change, some super funds are leveraging their influence to encourage companies to invest more in renewable energy sources. For example, Vision Super, HESTA, and the Australian Retirement Trust have been pressuring companies like Woodside to adopt stricter climate policies, as highlighted in a report by the Australian Conservation Foundation.
The imbalance between public statements on climate accountability and actual investment practices is evident in cases like AustralianSuper increasing its stake in Woodside by nearly 19 times in 2022. This disparity underscores the need for greater transparency and alignment with climate goals in superannuation fund investments.
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