Super funds & fossil fuels

ALL SMOKE AND MIRRORS.

Nearly all major Australian super funds are invested in many of the 23 “Out of Line- Out of Time” companies whose fossil fuel mining and burning activities are consistent with an unlivable 3, 4 or 5 degree temperature rise for our planet.

One of the worst – Woodside – has just announced its’ “Net Zero by 2050” plan. Not only is this grossly inadequate (The Climate Council says we need 75% cuts by 2030)  – as we will see – this and other claims are deceitful greenwash…

Let’s look at one super fund in more detail. Hesta is typical of many other funds in that it likes to make out that it’s doing the right thing regarding climate change, and that it’s divested from thermal coal. After all it claims to represent the community sector and the caring professions. Take a look beneath the surface, however…

 

WHAT HESTA IS DOING.

Recent analysis of 10 major super funds shows that Hesta is the only one that has increased its investments in fossil fuel companies, those same companies that form Australia’s notorious fossil fuel lobby, using their influence to capture and water down federal climate policy in recent decades.

Based on Market Forces’ analysis, between June 2018 and March 2021, Hesta increased its exposure to “Out of line-Out of time” companies by more than 14 percent.

OUR MONEY TO BIG POLLUTERS – COMMUNITIES, CLIMATE AND COUNTRY – UNDER ATTACK

Hesta is still investing in companies like: Woodside Energy, Santos, Origin, AGL.

  • Woodside Energy (Australia’s largest oil and gas producer – about to launch the “worse than Adani” Scarborough gas project ).
  • Santos – about to mine gas in Narrabri – being fought by a broad network including farmers and indigenous traditional owners,
  • Origin – about to mine gas in the Beetaloo Basin and being fought by indigenous traditional owners
  • AGL (having the dubious distinction of being Australia’s No. 1 polluter – and planning to keep burning coal till 2048).

ACCOUNTING TRICKS & DECEIT

Hesta is obviously aware it needs to appear to be doing something. It has a lot of good sounding plans that don’t match the reality that steep emissions cuts are needed by 2030 to avoid out of control climate change. Their published target of 33% emssions cuts by 2030 across their investments does not take into account the emissions from the end use of the gas/fossil fuels from the above companies.  Hesta’s published calculations, for example, take account of only 10 percent of Woodside’s emissions, covering the extraction and processing of the gas. They totally ignore the other 90 percent – the actual burning of that gas when it’s exported.

FAILING ON ITS OWN POLICY OF “ENGAGEMENT”

This super fund even failed to vote for a proposal for Woodside to cut gas production in line with the Paris climate goals at the company’s 2020 AGM. Despite being a big shareholder – with the kind of clout any company would have to pay attention to – Hesta has voted against a number of key climate-friendly shareholder initiatives.

However, in Hesta’s correspondence to us they say, “we prioritise engagement with high emitters and other industries dependent on fossil fuels to encourage them to transition their businesses for a low-carbon future. We are already in ongoing dialogue with oil and gas companies about the steps they can take…”

Meantime, they continue to invest in Woodside, a company  that openly publicizes its plans to increase its overall production by more than 70 percent from 2019 to 2028. And if you want to know what that involves, read more.

There are faint glimmers of hope, signs that every now and again Hesta does spare a thought for the future of our planet.

In 2020 the Fund said it would no longer invest in any company that generates more than 15 percent of its revenue from the exploration, production or transportation of thermal coal. Turning its back on companies like Whitehaven Coal and New Hope Corporation is a move in the right direction.

But when questioned by ‘The Hesta 10’ at the 2021 Annual Members Meeting, Hesta admitted that the only reason for divesting from these coal companies was because of financial risk – not because they did not align with the 1.5 degree Paris target. If Hesta, and other major funds, really decided to align with the Paris target  – they would have to dump all their Out of Line Out of Time, fossil fuel companies.  Hesta is, regrettably, still more talk than action when it comes to climate change. Still too keen on obfuscation, on smoke and mirrors.

You can see more regarding our correspondence with Hesta here.