1 December 2021
Executives and board members of super fund HESTA failed to address members’ concerns about the fund’s investments in companies expanding oil and gas production at its annual member meeting yesterday evening. A group of members calling themselves the ‘HESTA 10’—who have been engaging with HESTA over the fund’s position on fossil fuels for quite some time—attended the online meeting and submitted questions about the fund’s climate policy and commitments, including why HESTA continues to invest in climate-wrecking companies like Woodside and Santos. However, HESTA failed to answer any of the nearly 20 questions this group put to the panel.
The HESTA 10 are a part of the Fossil Free Super campaign, which is made up of community sector workers and their supporters who are concerned about HESTA’s continued investment in companies expanding the scale of the fossil fuel sector. These members have repeatedly engaged with HESTA over its climate commitments, but to date have received inadequate responses from the fund and have made plans to collectively and publicly divest later this week.
Despite claiming to be a climate leader, HESTA has let down its members by dodging accountability and failing to address the climate concerns raised by the HESTA 10. The fund publicly endorses the climate goals of the Paris Agreement, yet continues to invest in fossil fuel companies that have expansion plans that would doom the Paris Agreement to failure.
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HESTA fails to stand up to member scrutiny, despite claiming to be a climate leader
HESTA has stated its plans to align its actions and investment portfolio with the goals of the Paris Agreement, as well as achieve net zero emissions by 2050, and claims to be the “…first major Australian superannuation fund to make carbon reduction commitments of this scale.” However, when questioned yesterday evening over why the fund continues to invest in companies that either cannot or will not align with the Paris climate goals, members were met with radio silence.
Australian oil and gas giants Woodside and Santos, for example, are both pursuing massive expansion projects that are incompatible with the climate goals of the Paris Agreement and net zero emissions by 2050. Woodside’s Scarborough gas and Pluto LNG project, if allowed to go ahead, would result in the emissions equivalent of 15 coal power stations running for 30 years, a massive carbon bomb that we can’t afford to ignite if we want to keep global warming to below 1.5°C. HESTA neglected to address the clear inconsistency between its continued investment in companies like Woodside and Santos, and its stated climate commitments.
The fund answered just one climate-related question at its annual member meeting, with Chief Investment Officer (CIO) Sonya Sawtell-Rickson asked whether or not HESTA thinks the fossil fuel industry is ‘good for the planet.’ Aside from not actually answering the question, Sawtell-Rickson’s response included a doubling-down on the fund’s ‘engagement’ strategy, whereby HESTA seeks to influence polluting companies to get into line with climate goals by remaining invested in them. Sawtell-Rickson claimed HESTA uses its proxy voting power as one such method of supporting climate action through engagement. However, in 2021 HESTA has voted AGAINST many shareholder resolutions, calling on companies including Woodside, Santos, BHP and Commonwealth Bank to bring their fossil fuel production and lending into line with global climate goals.
Members are fed up with the lack of accountability and greenwash
Further to her commentary above, Sawtell-Rickson also said: “We can’t divest our way to a low-carbon future.” However, HESTA has already divested from thermal coal companies like Whitehaven and New Hope. Both of these coal companies have expansion plans inconsistent with the Paris climate goals, just like Woodside and Santos. So why hasn’t the fund applied the same reasoning to all fossil fuel companies?
Having voted against several key climate-related resolutions this year and failing to stop Woodside from pursuing one of Australia’s biggest new gas developments in a decade, HESTA clearly isn’t ‘engaging’ its way to a low-carbon future.
It is this very behaviour that has galvanised the HESTA 10’s decision to divest from the fund. These members are fed up with HESTA’s lack of accountability and undermining of its own stated climate commitments, which appear to be nothing more than greenwash at this point. If HESTA won’t ditch dirty oil and gas companies that cannot or will not fall into line with the Paris climate goals, it will likely endure further scrutiny from members, which it will need to face up to at some point.
References https://twitter.com/fossilfreesuper/status/1465601881502208002  fossilfreesuper.org  https://twitter.com/fossilfreesuper/status/1465601883544834051  https://www.hesta.com.au/about-us/media-centre/HESTA-announces-net-zero-by-2050-aim-climate-change-plan.html  https://d3n8a8pro7vhmx.cloudfront.net/ccwa/pages/1/attachments/original/1622622008/Why_the_Scarborough_LNG_development_cannot_proceed_web_final.pdf?1622622008