Melbourne, Friday 23 September, 2016: According to analysis by environmental finance campaigners Market Forces, 83% of assets under management in Australia’s fifty largest superannuation funds are undisclosed, equating to nearly $1 trillion of assets.
The analysis comes as new polling commissioned by Market Forces reveals 86% of Australians believe they should have the right to know where their superannuation is invested.
According to the polling 64% of Australians also believe their superfund should be proactively reducing its exposure to fossil fuel investments and a third would be prepared to switch their superannuation to another company if their own were found to be investing in coal or coal seam gas extraction.
“At a time when investors around the world are under increasing pressure to disclose the carbon risk in their portfolios, the Australian super industry has a trillion dollar secret,” said Market Forces analyst Daniel Gocher.
“Australians are in the dark about whether their money is supporting environmentally destructive companies because our compulsory superannuation is an investment black box.”
“One in three super fund members would be prepared to move to another fund out of concern for the environmentally damaging activities they are invested in. Yet most funds leave their members helpless and clueless about what sort of future their retirement savings are delivering.”
Energy Super is the only super fund to disclose its entire portfolio and only three other funds disclose more than 50% of their holdings – HOSTPlus, Cbus and VicSuper. Overall disclosure across the largest fifty funds is just 16.6%, meaning close to $1 trillion under management is not disclosed.
Nineteen funds don’t disclose any information at all about their investments. Several of the fund managers, including BT, Colonial and Macquarie operate ‘Wrap’ platforms – which may explain some of the secrecy – yet even their default options are not disclosed.
Six years after the 2010 Cooper Review recommended that large funds “should be required to disclose their complete portfolio holdings on a six-monthly basis” in a standardized format, Australia’s superannuation system is no more transparent and in dire need of reform. At an Australian Institute of Superannuation Trustees (AIST) conference earlier this month, its chief executive Tom Garcia even stated that the industry had done “an extraordinarily bad job” of communicating its investment story.
Although a relatively recent development, the reporting of carbon intensity – the volume of emissions emitted (CO2e) per million dollars invested – is only disclosed by a small number of funds. Only five of Australia’s fifty largest super funds are currently Montreal Pledge signatories – BT, Catholic Super, HESTA, Local Government Super and VicSuper. Australian Ethical Investment is also a signatory, but falls outside the fifty largest funds.
“Though the industry claims to support the improvement of disclosure standards, the reality shows this is manifestly not the case,” said Gocher. “Australians have a right to know where our money is invested and transparency is a vital first step to enabling it to be used as a force for good.”
To view the polling: http://superswitch.org.au/super-polling-2016
To view the Disclosure Top 50 research: http://superswitch.org.au/news/1-trillion-in-super-fund-assets-hidden-from-the-public/