Despite an Australian government push towards net zero by 2050, a just-released report shows investment by leading superannuation funds in gas, coal, and oil interests has almost doubled since 2021.
From 2021 to December 2023, Australian 30 largest retirement funds have increased their investment in traditional energy companies from $19 billion to $39 billion (US$25.93 billion).
In comparison, the super funds invested $7.7 billion in green energy solutions—a decrease of half a billion over the same period.
Advocacy group Market Forces put together the report scrutinising whether super funds were investing in ways that align with climate change goals.
According to the group, the three energy companies, Woodside Energy, Santos, and Whitehaven Coal were identified as Australia’s biggest emitters, accounting for 59 percent of projected emissions.
“Thousands of members are furious that large funds including AustralianSuper, Australian Retirement Trust and HESTA are failing to rein in the ‘climate-wrecking’ business plans of companies like Woodside,” claimed Market Forces spokesperson Brett Morgan.
On its website, Market Forces publishes a list of 190 companies worldwide that it says contribute to climate change.
An average of 9 percent of a super fund’s members’ contributions are being directed towards a “small but devastatingly dangerous group of companies driving us towards catastrophic climate change,” the group said, leading to allegations of “green-washing.”
This practice involves making misleading claims about the company’s environmental credentials.
The three funds most exposed to fossil fuel companies were UniSuper (11.5 percent), Commonwealth Super Corp (10.8 percent), and MLC (10.4 percent).
AustralianSuper also increased its stake in Woodside by nearly 19 times in 2022, highlighting an imbalance between its public statements on climate accountability and its actual investment practices.
Greenwashing Problems
Concerns about greenwashing have led to increased scrutiny and enforcement from regulatory bodies, particularly the Australian Securities and Investments Commission (ASIC).In 2023, ASIC took legal action against superfund Mercer over misleading members about the sustainability of its investments. The ruling led to Mercer paying $11.3 million in penalties.
To get around committing to emissions targets, some companies rely heavily on carbon offsets.
Meanwhile, some super funds are using their influence to push companies to be more proactive in investing in renewable areas.
