Australia’s Largest Super Funds Invest $34 Billion in Fossil Fuels in 2022: Report

Australian dollars in Sydney, Australia, on Jan. 15, 2016. AAP Image/Joel Carrett

New research has found that the 30 largest superannuation funds in Australia invested $34 billion in fossil fuel companies, both domestic and overseas, in 2022.

Market Forces, an environmentalist organisation that wants financial institutions to “go green,” has released an analysis indicating that Australia’s biggest funds have raised their investment in companies developing coal, oil and gas projects by 50 percent in the past year.

Specifically, it said those super funds had around 9.3 percent of their members’ share investments in fossil fuel companies on average in 2022, up from 6.3 percent in the previous year.

Applying this data to the entire super industry, Market Forces estimated that companies directly involved in expanding fossil fuels were now holding over $140 billion worth of Australians’ retirement savings.

AustralianSuper, the largest super fund in the country, topped the list of financial institutions investing in fossil fuel with around $8.8 billion in investment, followed by Aware Super and Rest at $2.72 billion and HESTA at $2.39 billion.

Meanwhile, the funds with the default investment options most exposed to fossil fuel were Commonwealth Super Corp (11.5 percent), MLC (11.4 percent) and Russell Investments (11 percent).

Market Forces said the war in Ukraine had caused the share value of fossil fuel companies to rise, partly resulting in super funds’ increased investment exposure.

However, it noted that the analysis showed some super funds had bought millions of shares in fossil fuel companies.

Super Funds Criticised for Investing in Fossil Fuels

Following the report’s release, Market Forces superannuation funds campaigner Brett Morgan criticised super funds for their increased investments in fossil fuel.

“Super funds are making a mockery of their own commitments to net-zero by buying up wholesale in companies expanding fossil fuels and letting them get away with trashing our climate,” he said.

The campaigner also singled out AustralianSuper for buying 30 million shares in petroleum producer Woodside and demanded the fund provide explanations to its members.

“AustralianSuper needs to explain to its millions of members why it’s actively buying shares in Woodside while failing to address this company’s reckless fossil fuel expansion plans,” Morgan said.

An aerial shot of Woodside's North-West Shelf gas plant in Karratha, Australia, on April 17, 2008. AAP Image/Rebecca Le May

Meanwhile, AustralianSuper defended its decision, saying it had increased its exposure to Woodside after the company merged with the oil and gas portfolio of resources giant BHP.

“The gas sector is an important part of the orderly energy transition over coming years,” a spokesman for the fund said in comments obtained by AAP.

“As an active and responsible owner, we will continue to proactively engage with Woodside to understand how the company plans to transition its operations to deliver long-term value to members in a low-carbon environment.”

New Super Reform

The research comes after the Australian government announced new requirements for businesses to pay super to their workers on payday.

From July 1, 2026, businesses of all sizes across the country will be required to pay super on fortnightly cycles instead of every three months at the minimum currently.

The policy is the government’s latest crackdown on super underpayments, which are a common issue in many industries.

The federal government said the super reform would help an average 25-year-old income earner get an extra $6,000 or 1.5 percent in super payments when they retired.

It also noted that workers who were in lower-paid, casual, and insecure work would benefit more from the policy as it made it harder for employers to exploit them.

“It will strengthen the system and will boost retirement incomes,” Treasurer Jim Chalmers said.

“The main reason for that is it will make it less likely that people will miss out on the super that they’ve earned and that they’re entitled to.”

At the same time, the government said it would provide more resources for the Australian Tax Office to help it crack down on super underpayments, as well as set up new internal targets for recovery payments for the agency.