The Climate Wreckers Index

The Climate Wreckers Index companies could add the equivalent of…

of Australia’s national annual emissions!

*In order to compare funds with different allocations to publicly-traded company shares (listed equities), we calculated each fund’s investment exposure to the Climate Wreckers Index as a proportion of its total allocation to listed equities, minus any investments in pooled or managed investment fund products, such as Exchange Traded Funds (ETFs). This allows us to properly compare funds’ direct investments in Climate Wreckers Index company shares. You can read the full methodology below.

Each fund in the above table was contacted ahead of publication and given the opportunity to provide any further disclosures not captured by our research and raise any concerns relating to our analysis.

In 2022, several events changed the nature of the share market. For example, Russia’s invasion of Ukraine caused a shock to the global energy system, resulting in higher prices for fossil fuels. After a decade of declining fossil fuel share prices, the value of oil and gas companies increased in 2022 as a result of their war profiteering. BHP delisted from the London stock exchange and consolidated into its Australian Securities Exchange (ASX) listed entity in 2022, increasing the company’s proportion of the total ASX market and therefore explaining some increase in super fund options’ exposure.

Although this can explain in part why the average super fund’s exposure to the Climate Wreckers Index has increased over the past year, our analysis has also identified some super funds buying up big in the worst of the worst companies. See the case studies section for further details on which fund options have the highest investment exposures to some of the worst of the worst Climate Wreckers.

The table below shows the full list of the 190 companies that make up the Climate Wreckers Index.

This is not an exhaustive list of companies involved in coal, oil and gas expansion, just the worst of the worst climate wreckers that our super funds can invest in.

For the first time, we’ve included 10 companies involved in developing LNG import and export terminals to reflect the significant role these companies play in enabling new gas fields. We have also removed Russian companies from the list, due to sanctions placed on these companies by Australian and US authorities in 2022 in response to Russia’s invasion of Ukraine.

Why is BHP included?
BHP is included in the Climate Wreckers Index because of its massive coal reserves, and plans to expand coal projects. Our analysis of Global Energy Monitor (GEM) data finds that BHP has the 12th-highest coal reserves in operating mines of any listed company globally, at nearly 2 billion tonnes. At their current production capacity, BHP’s operating mines have a combined coal reserves life of 40 years.

For BHP to drop off the Climate Wreckers Index, the company must commit to managing down its existing coal mining assets in a manner consistent with the climate goals of the Paris Agreement. Far from this, BHP has applied to extend its Peak Downs mine to produce coal into the next century, and is planning to build the greenfield Blackwater South coal project with a life of 90 years!

By contrast, South32 – another diversified miner currently producing coal – is not included in the Climate Wreckers Index as it has no coal expansion plans, nor does it have coal reserves anywhere near as large as BHP. The company has shelved several coal projects in recent years, including the Dendrobium extension project, which would have added 5.2 million tonnes of production capacity per year to South32’s books, a total of 78 million tonnes of coal until 2041.

Woodside

Woodside is pursuing massive new oil and gas projects consistent with the failure of the Paris Agreement, including the monstrous Scarborough gas field off the coast of Western Australia (WA), and the associated Pluto Train 2 liquified natural gas (LNG) processing plant. The Scarborough-Pluto 2 project could result in the emissions equivalent of running 15 coal-fired power stations every year, threatens to accelerate degradation of the Murujuga rock art (proposed for World Heritage listing) due to industrial emissions, and would also cause significant impacts to the local marine environment. Independent analysis has concluded the Scarborough-Pluto combined project “…represents a bet against the world implementing the Paris Agreement”. Woodside also intends to exploit the monstrous Browse offshore gas basin, a project even bigger and more polluting than the already out-of-line Scarborough project.

Despite the urgent need for fossil fuel production to begin declining in line with global climate goals, Woodside plans to significantly increase oil and gas production over the next five years. Beyond clearly contravening the IEA’s key conclusion that there is no room for new oil and gas production projects in the pathway to net zero emissions by 2050, a number of independent analyses of new oil and gas production projects being pursued by Woodside reveals how significantly out of line they are with global climate goals. Carbon Tracker, for example, has found that Woodside’s proposed Pluto Train 2 facility is not even financially competitive in a catastrophic 2.7°C global warming scenario, let alone in a world where we achieve the 1.5°C goal of the Paris Agreement.

AustralianSuper’s Balanced option has the highest exposure to Woodside as a proportion of listed equities (2.25%), followed by Equipsuper’s Equip MySuper option (1.99%) and ESSSuper’s Growth option (1.90%). NGS Super fully divested from Woodside in 2022.

Santos

Santos is pursuing massive new oil and gas projects consistent with the failure of the Paris Agreement, including the dangerous and destructive Narrabri gas project in the Pilliga Forest, New South Wales (NSW). Santos merged with Oil Search in late 2021 to make the combined business one of the 20 largest companies on the Australian Securities Exchange (ASX). This new fossil fuel giant has one main aim: produce more oil and gas. In fact, Santos is pursuing major new projects that would increase its emissions by 40% from 2022 to 2030, despite the urgent need for fossil fuel production to begin declining in line with global climate goals

 Santos, Woodside projected emissions, with climate targets impact

Santos plans to drill 850 gas wells throughout the Pilliga Forest and surrounding farmland near Narrabri, NSW. The company is still desperately pursuing this toxic project, despite years of opposition from local Gomeroi Traditional Owners and farmers, as well as former Chief Scientist Penny Sackett, who has confirmed the project is inconsistent with the Paris Agreement and net zero by 2050.

Santos is also pushing ahead with its Barossa gas project, a massive new proposed gas field 300km North of Darwin, Northern Territory (NT). If the project goes ahead, Santos will transport gas from the Barossa field to an existing LNG processing facility in Darwin. The extremely high carbon dioxide (CO2) content of Barossa gas has led energy experts to state that the Barossa to Darwin LNG project looks like it’s shaping up to become “…a CO2 emissions factory with an LNG by-product.”

Santos’ oil and gas projects are not just damaging to a safe climate future. Tiwi Islands Traditional Owners successfully challenged Santos over its Barossa project in the Federal Court in 2022 for failing to adequately consult with them, subsequently winning the follow-up appeal from Santos.

Equipsuper’s Equip MySuper option has the highest exposure to Santos as a proportion of listed equities (1.48%), followed by Hostplus’ Balanced option (1.30%) and Russell Investments’ Goal Tracker option (1.07%). NGS Super fully divested from Santos in 2022.

Whitehaven

Whitehaven Coal is the biggest undiversified coal mining company on the Australian share market. Whitehaven’s plans to massively expand the coal industry are completely at odds with the Paris Agreement goal of limiting global warming to 1.5ºC.

Whitehaven is planning to spend around $2 billion on three new coal mines and expansions: Vickery, Narrabri Stage 3 and Winchester South. These mines have marketable coal reserves of over 500 million tonnes. When emissions from digging up and burning the coal are added, over their lifetimes these three mines would unleash 1.1 billion tonnes of carbon emissions, the equivalent of more than twice Australia’s annual emissions.

Whitehaven’s existing Maules Creek coal mine is one of Australia’s most controversial mining projects and was strongly opposed by local farmers and Gomeroi traditional owners. Despite a massive community campaign that included a two year blockade, Whitehaven bulldozed hundreds of hectares of critically endangered forest that provide important habitat for rare and endangered species like the Superb Parrot, Regent Honeyeater and Squirrel Glider.

Lock the Gate Alliance has compiled a comprehensive list of Whitehaven’s law-breaking over the last 10 years. This compilation shows the company and its subsidiaries have been found guilty or investigated 35 times and incurred almost $1.5 million in total penalties.

ESSSuper’s Growth option has the highest exposure to Whitehaven as a proportion of listed equities (0.78%), followed by State Super’s Balanced option (0.23%) and Brighter Super’s MySuper option (0.20%). Commonwealth Super Corp and Rest appear to have removed Whitehaven from their default options in 2022.

New Hope

New Hope is an Australian-based undiversified coal mining company deriving more than 95% of revenue from the sale of thermal coal. Despite there being no room for new or expanded coal mines if we’re to achieve the climate goals of the Paris Agreement or net zero emissions by 2050, New Hope is developing a major expansion of its New Acland coal mine on some of Queensland’s best farming land.

New Hope plans to spend around $900 million on its New Acland Stage 3 coal expansion, one of the most contested coal mining projects in Australian history. New Hope has determined there’s a further 200 million tonnes of coal reserves at New Acland, and Stage 3 would increase the mine’s production capacity to 7.5 million tonnes per year and extend its production life by 12 years.

Aside from the physical destruction of this prime farming land, there is deep community concern about the impact of the mine on local groundwater aquifers. According to the Oakey Coal Action Alliance, around 20,000 hectares of cropping land surrounding the mine is at risk of permanent groundwater impacts. Despite several rounds of water modelling revisions, expert scientists remained unconvinced by New Hope’s final water management plans. New Hope also operates the Bengalla coal mine, which is licensed to extract up to 15 million tonnes of coal per year until 2039.

Insignia Financial’s IOOF Balanced Investor Trust option has the highest exposure to New Hope as a proportion of listed equities (0.24%), followed by Colonial First State’s FirstChoice Wholesale Growth option (0.20%) and Mercer’s SmartPath 1969-1973 option (0.09%). Commbank Group Super, Commonwealth Super Corp and Rest appear to have removed New Hope from their default options in 2022.

Adani

Adani really needs no introduction. The company is responsible for the most controversial coal mine in Australia’s history: Carmichael.

Despite immense community resistance helping to significantly reduce the scale of the first phase of the Carmichael mine, Adani could still dig the biggest coal mine in Australia.

Adani Group’s other fossil fuel expansion plans include:

• Nearly doubling its coal-fired power capacity by 12 gigawatts (GW) to 26 GW, giving it more coal power capacity than all of Australia.
• Owning, developing or operating 155.6 million tonnes per annum (mtpa) of new thermal coal mining capacity, including the massive 60 mtpa Carmichael project in Australia, which would pave the way for more massive coal mines in the untapped Galilee Basin.
• New coal and LNG terminals at Adani Ports and Special Economic Zone’s ports.
• A highly polluting facility that would convert coal, including imported thermal coal, into plastics.

Brighter Super’s MySuper option has the highest exposure to Adani Group companies (excluding Adani Green) as a proportion of listed equities (0.05%), followed by Commbank Group Super’s Balanced option (0.04%) and OnePath’s ANZ Smart Choice 1970s option (0.04%). GESB and HESTA appear to have removed these companies from their default options in 2022.

Adaro

Adaro Energy Indonesia (Adaro) is a pure play coal mining company with plans to expand. Adaro produced 62.8 million tonnes of coal in 2022 alone – an increase of almost 20% from 2021 – and has coal reserves of 1.1 billion tonnes. Burning all of these reserves would release 2.2 billion tonnes of CO2-e, almost the equivalent of India’s total annual emissions. Adaro has stated plans to ramp up coal production to 64 million tonnes in 2023. To justify its business plans, Adaro presents global coal demand forecasts that are even higher than the International Energy Agency’s 2.5°C-aligned STEPS scenario.

Adaro also plans to build an aluminium smelter through a subsidiary which would be powered by new coal-fired power plants in North Kalimantan, a province of Indonesia on the island of Borneo. At full capacity, the smelter would produce 1.5 million tonnes of aluminium per annum and at least two-thirds of its power needs would be met by burning coal. The first phase of the smelter project includes building a new 1.1GW coal power plant, meaning the smelter would emit 5.2 MtCO2-e per annum throughout the first phase.

State Super’s Balanced option has the highest exposure to Adaro as a proportion of listed equities (0.05%), followed by Mercer’s SmartPath 1969-1973 option (0.01%) and Colonial First State’s FirstChoice Wholesale Growth option (0.01%). GESB and Spirit Super appear to have removed Adaro from their default options in 2022.

TEPCO & Chubu Electric

TEPCO, Chubu and their joint venture JERA are betting against the climate goals of the Paris Agreement and undermining their own net zero emissions commitments by expanding the liquefied natural gas (LNG) and coal power sectors.

JERA is responsible for a whopping 169 MtCO2-e annually, or 15% of Japan’s annual emissions (2020). The company is currently constructing three additional coal-fired power plants – two in Japan and one in Indonesia.

JERA is also pursuing significant involvement in the LNG sector, including gas fields, LNG terminals and LNG to power projects in countries such as Australia, Bangladesh, and Vietnam. This includes a stake in the Barossa gas field, discussed in the Santos case study above.

Vision Super’s Balanced Growth option has the highest exposure to TEPCO as a proportion of listed equities (0.03%), followed by State Super’s Balanced option (0.02%) and AMP’s MySuper 1970s option (0.02%). CareSuper and Russell Investments appear to have removed TEPCO from their default options in 2022.

Vision Super’s Balanced Growth option has the highest exposure to Chubu Electric as a proportion of listed equities (0.07%), followed by GESB’s My West State Super option (0.03%) and State Super’s Balanced option (0.02%). CareSuper, Cbus, Russell Investments and Spirit Super appear to have removed Chubu Electric from their default options in 2022.

Mitsubishi Corp

Mitsubishi Corp turned up in our research as expanding fossil fuels in three separate areas: gas power plants, coal production, and oil and gas production.

Mitsubishi is expanding its gas business by building gas fields, LNG terminals and LNG to power projects, contrary to the International Energy Agency’s ‘Net Zero by 2050’ scenario, which makes clear that achieving this goal means no new fossil fuel supply and an extremely limited and narrowing role for fossil fuels in electricity generation. It also finds that “there is no further need for additional [LNG] capacity beyond what exists or is under construction”.

Meanwhile, Mitsubishi’s coal mining subsidiary is expanding its metallurgical coal mining operations in Australia.

GESB’s My West State Super option has the highest exposure to Mitsubishi Corp companies* as a proportion of listed equities (0.07%), followed by AMP’s MySuper 1970s option (0.06%) and HESTA’s Balanced Growth option (0.05%). Vision Super appears to have removed Mitsubishi Corp companies from its default option in 2022.

* Excluding non-fossil fuel-related subsidiaries (see methodology below)

General Electric

General Electric (GE) has historically been heavily involved in coal power generation, both in the United States and also as a developer of coal power plants internationally. While the company announced it is exiting new coal power builds, it is planning major expansions in the LNG and gas power sectors.

Market Forces’ research has found GE is involved in new LNG to power plants in Vietnam and Bangladesh with combined capacity of 24.6 GW.

Spirit Super’s Balanced (MySuper) option has the highest exposure to GE as a proportion of listed equities (0.32%), followed by Australian Retirement Trust’s Lifecycle Balanced Pool option (0.24%) and Commonwealth Super Corp’s PSS Default option (0.20%). CareSuper appears to have removed GE from its default option in 2022.

¹ The parent company was always included.

² Subsidiaries in neither the included nor excluded columns were not found in any of the super funds analysed