Wednesday 15 March, 2023: A new report by Market Forces finds Australia’s five biggest super funds are greenwashing and exposing themselves to legal risk by failing to effectively engage with companies expanding fossil fuels.
Managing more than $1 trillion of members’ retirement savings, the five funds analysed in the report, AustralianSuper, Commonwealth Super Corporation, Australian Retirement Trust, Aware Super and AMP, have all committed publicly to manage climate risk. Four out of five funds have also set targets to achieve net zero emissions by 2050.
The report – ‘Stewards of Climate Disaster’ – reveals all five funds are claiming to engage with fossil fuel companies to drive climate action, but failing to demonstrate effective engagement strategies, including with Australia’s two biggest oil and gas producers, Santos and Woodside.
“The findings of our report expose Australia’s biggest super funds for failing to hold the most climate-damaging companies to account over their fossil fuel expansion plans,” said Brett Morgan, report author and Superannuation Funds Campaigner, Market Forces.
“There’s an appalling gap between climate commitments and real action by our biggest super funds and this is a slap in the face for members who deserve a safe future to retire into.”
All five major super funds are relying on influencing fossil fuel companies via ‘active ownership’ of shares and ‘engagement’ to meet climate targets and manage growing risk.
Yet the funds have failed to comprehensively adopt and implement effective active ownership practices identified by authoritative investor initiatives including the UN Principles for Responsible Investment and Science-based Targets Initiative.
The report highlights that financial institutions which make net zero commitments are legally required to have ‘reasonable grounds’ to believe they will achieve their goals. Super funds and their directors failing in their duties could be engaging in misleading and deceptive conduct.
“Super funds relying on active ownership to fulfil their climate commitments but failing to rein in rampant oil and gas expansion plans are greenwashing and exposing themselves to legal action for misleading conduct,” said Mr Morgan.
“Australia’s biggest super funds are failing to bring climate-wrecking companies like Santos and Woodside into line with a safe climate future. Funds must step up to prevent fossil fuel expansion, and divest from companies that fail to respond.”
“Net zero by 2050 means there can be no new oil and gas developments, but too many super funds have their heads buried in the sand on meaningful climate action.”
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