NEW REPORT: Super funds lose billions on fossil fuels as divestment calls mount
Sydney, 10 February 2016
Report identifies $5.6 billion in losses on fossil fuel stocks
Funds lose an average $1109 per member over two years
Colonial tops list of poor performers
Website launched to help super fund members move their money out of fossil fuels
Major global investors planning to divest of coal
Australia’s superannuation industry has lost billions of dollars on investments in coal, oil and gas shares in the last two years. A study from Market Forces has found that fifteen major retail, industry and public sector fund options have lost an estimated $5.6 billion – or up to $3024 per member – on fossil fuel company investments since the start of 2014.
Of the super products studied, the most impacted by the fossil fuel sector’s poor performance were Colonial First Choice, MLC MySuper and AMP MySuper No2, Mercer Smart Path and Australian Super MySuper, all of which lost an estimated 2% on the coal, oil and gas sectors.
The report comes as asset managers around the world continue to announce plans to divest from thermal coal, the most greenhouse gas intensive fossil fuel. Last week the US$186 billion California voted to divest from thermal coal companies, citing environmental and financial concerns. In December, Allianz, which manages €2 trillion, also announced it would wind back coal investments.
In Australia, a number of fund managers have spoken about the environmental and moral concerns of fossil fuel investments, as well as the financial risks attached to investing in high-carbon assets. Yet the lack of action to date now has some sobering figures attached to it in this report.
“Australia’s superannuation industry is utterly failing to respond to its members’ concerns about climate change and the damage caused by fossil fuels”, said Market Forces analyst Daniel Gocher. “They claim to understand the risks and concerns, yet those who have bothered to take action have simply treated climate change and fossil fuel risks as a niche concern, creating boutique options for a few of their members instead of taking systemic action.”
“As a result, millions of people who care about protecting our land, water, environment and climate are still financing the very industry which threatens them.”
“To make matters worse, the fossil fuel sectors have performed poorly in recent years – consistent with the concerns raised by the finance industry itself – meaning many have lost money by being forced to invest in companies that contradict their values.”
Market Forces has today also overhauled it’s “Super Switch” website, which profiles over 40 superannuation funds and identifies their exposure to the fossil fuel sector. Super Switch allows people to call on their own fund to disclose where their retirement savings are invested, divest from fossil fuels or start the search for a lower exposed fund.
So far, Super Switch has helped thousands of people move hundreds of millions of dollars out of funds containing fossil fuels and Market Forces hopes many more will take action as concerns over climate change and environmental issues mount.
“Super Switch makes it easy for people to find out if they are supporting the fossil fuel industry through their super, and use their power as members to force change from the super sector”, said Mr Gocher. “If funds won’t heed their own words on climate risk, perhaps disgruntled members making their concerns known will spur some fossil fuel divestment.”
To view the report, go to: http://www.marketforces.org.