Katerina Swanson
Australia's super funds are investing billions of dollars of retirement savings in fossil fuel projects, despite the fact that these projects are driving dangerous global warming. Market Forces' research reveals that Australian super funds include fossil fuels in their 'sustainable' options, with investments in coal, oil, and gas companies. This is concerning given the urgent need to transition away from fossil fuels to meet the Paris climate accord's 2°C limit and avoid the devastating impacts of climate change, such as the Great Barrier Reef wipe-out. While some funds like Australian Ethical Super and Future Super offer fossil fuel-free investment options, others like Mercer, CareSuper, and Vision Super have faced criticism for their fossil fuel investments. As a result, there are calls for super funds to increase their climate action and for individuals to consider the environmental impact of their investment choices.
| Characteristics | Values |
|---|---|
| Investment in fossil fuels | $34 billion |
| Year of investment | 2022 |
| Number of shares bought | 30 million |
| Investment in high-polluting companies | Increased from $19 billion to $39 billion since 2021 |
| Clean energy investment | Decreased |
| Number of companies invested in | 5 |
| % of emissions these companies are responsible for | 78% |
| Estimated CO2 emissions per million AUD invested in 2023 | 66.6 tonnes |
| Estimated CO2 emissions per million AUD invested in 2050 | 5.3 tonnes |
| Number of super funds in Australia | 30 |
| Amount invested in companies with fossil fuel expansion plans | $40 billion |
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What You'll Learn
AustralianSuper's commitment to net-zero carbon emissions by 2050
AustralianSuper has made a commitment to achieving net-zero carbon emissions by 2050. This commitment is in line with the Intergovernmental Panel on Climate Change's (IPCC) proposal to limit global temperature increase to 1.5 degrees by 2100, which aligns with the Paris Agreement temperature limit. Scenario modelling by global central banks indicates that achieving net zero emissions by 2050 will result in the lowest economic cost outcome in the long term, which is consistent with AustralianSuper's objective of helping members achieve their best financial position in retirement.
To monitor progress towards this goal, AustralianSuper conducts internal carbon tracking activities. Their analysis measures the current and estimated 2050 emissions (scope 1 and scope 2) of approximately 64% of their investment portfolio, including investments in Australian shares, international shares, property, and infrastructure asset classes. This analysis helps identify the largest contributors to emissions and informs their stewardship approach. AustralianSuper focuses its integration and stewardship activities on the measurement and management of scope 1 and scope 2 emissions of the investments in its portfolio.
However, AustralianSuper has faced scrutiny for its investments in fossil fuel companies. According to Market Forces, AustralianSuper increased its stake in Woodside by nearly 19 times in 2022 through its default investment option. This has led to criticism from members and concerns about greenwashing. Superannuation funds campaigner Brett Morgan emphasizes the need for super funds to implement concrete strategies to phase out investments in companies expanding fossil fuels.
Despite the criticism, AustralianSuper's investee companies responsible for almost 90% of emissions in these portfolios have made net-zero by 2050 commitments. The carbon intensity of these portfolios is estimated to significantly decrease by 2050, based on the emissions reduction commitments made by the investee companies. AustralianSuper's internally managed fundamental portfolios in the Australian shares asset class are actively managed by their in-house investment team, who use research, insights, and expertise to assess the quality and value of individual companies.
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AustralianSuper's investment in Woodside shares
AustralianSuper, Australia's largest superannuation fund, has been criticised for its investment in Woodside shares. The fund has been accused of "greenwashing" by investing in fossil fuel companies while claiming to support greater climate action. According to an analysis by Market Forces, AustralianSuper bought more than 20 million shares in Woodside in the first half of 2022, increasing its holdings by another 11.5 million shares in the second half of the year. This makes AustralianSuper one of Woodside's top five investors, with a total of 85 million shares or a 4.5% stake in the company as of 2023.
AustralianSuper's investment in Woodside, an energy giant with a focus on liquefied natural gas (LNG) and renewable projects, has been seen as a vote of confidence in the company and the energy sector as a whole. However, critics argue that the fund has failed to use its influence to demand an end to Woodside's oil and gas expansion plans, which are considered "climate-wrecking". In 2022, AustralianSuper voted against Woodside's climate plan, but in 2023, it did not disclose any votes against management, indicating a shift in its stance.
The fund has defended its position, stating that it supported Woodside's director nominations after the company pledged to increase engagement with shareholders over its climate policies. AustralianSuper has also committed to achieving net-zero carbon emissions by 2050 in its investment portfolio, aligning with the goals of the Paris Agreement. However, critics argue that the fund needs to implement concrete strategies to phase out investments in companies expanding fossil fuel use, rather than simply making pledges.
AustralianSuper's investment in Woodside has had a significant impact on the market, potentially boosting investor sentiment in the energy sector and attracting more capital to energy stocks. It has also helped Woodside fend off shareholder revolts over its climate policies, with the fund voting for the re-election of Ian Macfarlane, a senior Woodside director. While AustralianSuper's move has been strategic, it has drawn scrutiny and criticism from those advocating for more sustainable and ethical investment practices.
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AustralianSuper's investment in Freeport LNG
AustralianSuper, one of Australia's top super funds, has committed to achieving net-zero carbon emissions by 2050 in its investment portfolio. This commitment aligns with the Paris Agreement's temperature limit goal. While AustralianSuper has not disclosed specific companies it invests in, it has provided insights into its carbon tracking activities and emissions reduction targets.
IFM Investors, a global super-fund-owned asset manager, has over US$35 billion invested in the US across listed equities, infrastructure equity, and infrastructure debt. IFM is owned by more than 20 major Australian super funds, including AustralianSuper. One of IFM's major assets is Freeport LNG in Texas, among other energy and infrastructure investments.
Although AustralianSuper's involvement in IFM does not directly confirm its investment in Freeport LNG, it indicates an association with the energy sector. Australian super funds have faced scrutiny for their investments in fossil fuel companies and potential greenwashing. Despite claims of supporting climate action, many funds continue to invest in fossil fuel expansion.
AustralianSuper's commitment to net-zero emissions and its association with IFM Investors suggest a complex relationship with the energy sector. While it has not publicly divested from fossil fuels, its carbon tracking activities and emissions reduction targets indicate an awareness of the risks and opportunities presented by climate change. AustralianSuper's investment strategy aims to balance economic growth and environmental considerations.
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AustralianSuper's investment in coal, oil, and gas projects
AustralianSuper has committed to achieving net-zero carbon emissions by 2050, aligning with the Paris Agreement's temperature limit. They monitor their progress through internal carbon tracking, measuring current and estimated emissions from their investment portfolios.
However, according to Market Forces, AustralianSuper has significantly increased its investment in fossil fuel companies. In 2022, it increased its stake in Woodside by nearly 19 times, and it is estimated that AustralianSuper's default option bought at least 30 million Woodside shares in 2022. This has contributed to a broader trend of Australian super funds doubling their investment in fossil fuel companies, with the total investment reaching $34 billion in 2022.
This trend of increasing investment in fossil fuels has sparked scrutiny and criticism. Superannuation funds campaigner Brett Morgan has emphasised the need for super funds to implement concrete strategies to phase out investments in fossil fuel expansion. Members of super funds are also demanding greater climate action, with a focus on divesting from climate-wrecking companies.
While AustralianSuper has made a net-zero commitment, its investments in coal, oil, and gas projects have faced criticism for potentially undermining climate goals. The specific details of AustralianSuper's investments in these sectors are not publicly available, but their inclusion in the Market Forces report indicates a non-negligible level of involvement.
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AustralianSuper's investment in climate-wrecking companies
AustralianSuper has committed to achieving net-zero carbon emissions by 2050, aligning with the Paris Agreement's temperature limit. They monitor their progress through internal carbon tracking, focusing on scope 1 and scope 2 emissions, with the expectation that scope 3 emissions will reduce as scope 1 and 2 are managed.
However, according to Market Forces, AustralianSuper has significantly increased its investment in fossil fuel companies. In 2022, it nearly doubled its stake in Woodside, a major climate-wrecking company, and merged with LUCRF, increasing its Woodside shares further. This contradicts members' demands for divestment from fossil fuels and raises concerns about greenwashing. ABC News also reported that Australia's top 30 super funds, including AustralianSuper, have invested nearly $40 billion in companies with significant fossil fuel expansion plans.
AustralianSuper's investment in Woodside and other climate-wrecking companies contributes to environmental destruction and undermines the climate goals set out in the Paris Agreement. It raises questions about the fund's commitment to net-zero emissions and addressing climate change.
While AustralianSuper has made net-zero commitments, its actions contradict these promises. Members and campaigners are outraged by the fund's continued investment in fossil fuels, demanding transparency and genuine climate action. AustralianSuper needs to address these concerns and take concrete steps to phase out investments in climate-wrecking companies to prove its dedication to sustainability and members' best financial interests.
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Frequently asked questions
Yes, AustralianSuper is one of Australia's biggest super funds that invests in fossil fuels. However, they are not transparent about which fossil fuel projects they own.
Some alternatives to AustralianSuper that do not invest in fossil fuels are Future Super, UniSuper, and Australian Ethical Super.
The Climate Wreckers Index is made up of 190 publicly-listed companies with the biggest plans to expand the fossil fuel industry.
