In an attempt to justify continued investment in climate wrecking oil and gas producers Woodside, Santos and Origin, HESTA announced today it had asked the impossible of those companies, requesting they demonstrate how their new or proposed fossil fuel projects fit within a 1.5°C emissions reduction scenario.
Climate scientists have been telling us for years there is no room for new oil and gas fields to be developed if we are to limit global warming to 1.5°C, while independent analysis of Woodside, Santos and Origin’s new and planned projects has confirmed they are incompatible with that goal.
While it’s promising to see the fund finally put these companies on a ‘watchlist’ that could eventually lead to divestment, HESTA has failed to give any deadlines for the companies to meet its demands.
Members have been calling on HESTA to stop investing in companies expanding the fossil fuel sector for years. Those members will be devastated to learn HESTA is only now adding some of the worst offenders to its watchlist and that the fund is still open to the fallacy that opening up new oil and gas fields could somehow be consistent with a 1.5°C pathway.
With Woodside, Santos and Origin’s fossil fuel expansions having undermined the climate goals of the Paris Agreement ever since it was signed in 2015, HESTA should already have escalated its engagement with these companies by:
- Voting against directors due to the companies’ decisions to proceed with 1.5°C-incompatible projects
- Supporting and/or filing shareholder resolutions demanding these companies not pursue new fossil fuel projects, and managing down production consistent with a 1.5°C pathway.
Yet the fund has consistently failed to take these steps.
Now that HESTA has finally made clear it expects Woodside, Santos and Origin to prove investment decisions on major projects are consistent with a 1.5°C pathway, the fund must publicly commit to implementing its escalation strategy to full effect by immediately and loudly divesting from any company that makes a final investment decision to proceed with developing any new oil or gas fields.
Tell HESTA to divest from companies expanding the oil and gas industry.
HESTA’s requests of Woodside, Santos and Origin were announced alongside an update to the fund’s climate change statement, which included an increase to its interim portfolio emissions reduction target to 50% of normalised emissions* by 2030, up from 33% (from a 2020 baseline). However, this target fails to include portfolio companies’ Scope 3 emissions – most critically those generated when a fossil fuel producer’s coal, oil or gas is burned – or any fossil fuel reserves targets. This means HESTA’s target fails to account for the vast majority of the emissions of companies like Woodside and Santos.
Today’s announcement from HESTA is too little too late. The fund needs to stop wasting time asking the impossible of climate wrecking oil and gas producers, and start divesting from them.
*HESTA defines ‘normalised emissions’ as “…Scope 1 and 2 emissions per million dollars invested with emissions measured against a 2020 baseline.”