Fossil fuel exclusions
Coal exclusion policy categories
- Comprehensive - This super fund excludes investments in all companies that are either expanding the scale of the coal sector, and/or relying on scenarios consistent with the failure of the Paris Agreement to justify their future coal business prospects. No investments in companies like Whitehaven Coal, New Hope, AGL, Origin Energy, BHP, or South32.
- Some - This super fund excludes investments in companies deriving 33% or more revenue from coal mining and coal power generation in both active and passive holdings. No investments in companies like Whitehaven Coal, New Hope, AGL, or Origin Energy.
- Minimal - This super fund excludes investments in companies deriving 75% or more revenue from coal mining only in both active and passive holdings. No investments in companies like Whitehaven Coal or New Hope.
- None - No fund-wide exclusion policy. Can invest in companies like Whitehaven Coal, New Hope, AGL, Origin Energy, BHP, and South32.
Oil and gas exclusion policy categories
- Comprehensive - This super fund excludes investments in all companies that are either expanding the scale of the oil and gas sector, and/or relying on scenarios consistent with the failure of the Paris Agreement to justify their future oil and gas business prospects. No investments in companies like Woodside, Santos, Origin Energy, BHP, Beach Energy, Senex Energy, Carnarvon Petroleum, Karoon Energy, Cooper Energy, or FAR.
-
Some - This super fund excludes investments in companies deriving 50% or more revenue from oil and gas production in both active and passive holdings. No investments in companies like Woodside, Santos, Beach Energy, Senex Energy, Carnarvon Petroleum, Karoon Energy, Cooper Energy, or FAR.
-
Minimal - This super fund excludes investments in companies deriving 50% or more revenue from oil and gas production in active holdings only. No investments in companies like Woodside, Santos, Beach Energy, Senex Energy, Carnarvon Petroleum, Karoon Energy, Cooper Energy, or FAR.
-
None - No fund-wide exclusion policy. Can invest in companies like Woodside, Santos, Origin Energy, BHP, Beach Energy, Senex Energy, Carnarvon Petroleum, Karoon Energy, Cooper Energy, and FAR.
See each option's page for details of specific exclusions.
Australian share investments and disclosure
Company classifications are determined as per the methodology for the Out of Line, Out of Line study.
‘Fine' is the percentage of a super fund option's ASX 300 equities* investments that we know to be invested in companies that have demonstrated alignment with the Paris climate goals, or whose operations are not overtly inconsistent with the Paris climate goals.
'Work to do' is the percentage of a super fund option's ASX 300 equities investments that we know to be invested in companies that need to demonstrate alignment with the Paris climate goals.
'Borderline' is the percentage of a super fund option's ASX 300 equities investments that we know to be invested in companies that need to demonstrate alignment with the Paris climate goals, and are directly exposed to the fossil fuel sector.
‘Out of line’ is the percentage of a super fund option's ASX 300 equities investments that we know to be invested in companies that are actively undermining the climate goals of the Paris Agreement.
‘Not disclosed’ is the percentage of a super fund option's ASX 300 equities investments that is not disclosed to members.
*ASX 300 equities = shares in companies listed in the top 300 (by market capitalisation) on the Australian Securities Exchange.
Exposure calculations
- The 'undisclosed' portion (%) represents the relative value of an option's Australian shareholdings which are not disclosed.
- The portions (%) assigned to all other categories ('fine', 'borderline' and 'out of line') represent the (estimated or actual, see below) relative value of an option's disclosed ASX 300 shareholdings. ASX 300 shareholdings are defined as those companies listed in the S&P/ASX 300 list (as at 16 January 2020, sourced from Thomson Reuters Eikon)
- Where the value of an ASX 300 shareholding as a proportion of the option's overall Australian shareholdings was undisclosed or otherwise unable to be derived or obtained, the holding's ASX300 weight (%) as at 16 January 2020 was assigned. In other words, under these circumstances the value was estimated.
- Where (1) the value of an option's disclosed ASX 300 shareholdings relative to all Australian shareholdings (%) was less than (2) the value of disclosed Australian shareholdings relative to all Australian shareholdings (%) , the former (1) was proportionately increased so as to equal the latter (2).
Example
Option A disclosed 90% of Australian shareholdings with corresponding weights for each holding (% of Australian shareholdings). Option A's disclosed ASX 300 shareholdings represent 80% of its Australian share value and 30% are 'fine', 40% are 'borderline' and 10% are 'out of line'. The option's shareholdings would be displayed as follows:
- Undisclosed: 10%
- Fine: 30% / (80/90) = 33.75%
- Borderline: 40% / (80/90) = 45%
- Out of line: 10% / (80/90) = 11.25%
- Total: 100%
Climate Voting Record
The percentage of disclosed votes on climate-related shareholder resolutions that have been cast in favour of positive climate action since 2017. Data has been collated from ACCR's 2021 Super Votes report and associated datasets. Voting disclosures for funds not captured in ACCR’s study have been analysed by Market Forces and are up to date as of June 2020.
Calling for Paris-alignment
Funds must demonstrate that they are calling on specific companies to align their business strategies with the climate goals set out in the Paris Agreement. These calls must be made publicly, along with consequences for a company's failure to comply. One obvious way to do this is to vote in favour of shareholder resolutions calling on companies to align with the Paris climate goals.
Many shareholder resolutions calling on companies to align their business strategies with the Paris climate goals have been lodged in Australian since 2018, including: Whitehaven Coal, QBE, Rio Tinto, Suncorp, IAG, AGL, Origin, ANZ, NAB and Westpac.
Scenario Analysis
Scenario analysis is an important tool for funds to measure their exposure to climate change risk under different climate action scenarios, including ones in which the goals of the Paris Agreement are met. Funds should conduct and disclose detailed scenario analysis, providing quantified estimates of value at risk to their portfolios under different climate change scenarios, including one in which warming is held to 1.5°C.
Methodology:
- None = No publicly disclosed climate change scenario analysis
- Limited = Disclosure that provides some description of the exposure to climate risk a fund faces under different scenarios, but without quantitative information that allows the public to assess the extent of risk faced
- Partial = Disclosure of scenario analysis that considers a range of scenarios (including a 1.5°C scenario), provides quantitative data, but does not cover all fund holdings
- Detailed = disclosure of scenario analysis that considers a range of scenarios (including a 1.5°C scenario), provides quantitative data, and covers the fund’s holdings comprehensively
DISCLAIMER
The information provided by Market Forces does not constitute financial advice. The information is presented in order to inform people motivated by environmental concerns and take actions based on those concerns. Market Forces is organising data for environmental ends.
The information and actions provided by Market Forces do not account for any individual's personal objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice.
Market Forces recommends all users obtain their own independent professional advice before making any decision relating to their particular requirements or circumstances. Switching super funds may have unintended financial consequences.
Market Forces does not receive funding from any super funds or other financial institutions.
For more information about Market Forces, please visit the about page of the site. To see how we profile super funds go to the methodology page.
