Super fund Hesta faces backlash from school climate activists

The Australian organisation manages $68 billion but has come under fire from a grassroots movement for “greenwashing” in its advertising.

School climate activists have hit out at superannuation fund Hesta, claiming it was “greenwashing” its advertising after tipping a whopping $2 billion of its investment into fossil fuel companies, despite urging action on clean energy.

The School Strike 4 Climate (SS4C) sent a legal letter to Hesta asking it to cease using an advertisement that showed a student carrying a cardboard protest sign, claiming it suggested the group endorsed the super fund when that wasn’t the case.

The advert for the fund urged viewers to “take action” and “invest in clean energy”.

“We wanted to do this because we’re sick of companies greenwashing and using our name,” Charlotte Hall, an 18-year-old SS4C member from Melbourne, told The Guardian.

Ms Hall added the cardboard sign and phrase used on it – “school strike for climate” – was taken directly from the group’s branding and it didn’t “want to be a marketing tool for big companies”.

Protesters are seen during the School Strike 4 Climate protest in Melbourne, Victoria. Picture: Daniel Pockett/NCA NewsWire

Hesta has denied the claims, saying it used a “a generic, paid stock image of a climate protest sign“ rather than suggesting an affiliation with an organisation, and had removed the advertisement in March after listening to SS4C’s concerns.

“We have met with representatives from SS4C to explain our active ownership approach to climate change and we continue to welcome dialogue with a range of stakeholders interested in supporting the transition to a low carbon future,” the company said.

On its website, Hesta said it has committed to reducing the carbon emissions of its portfolio by 33 per cent by 2030 and to be ‘net zero’ by 2050 to help limit global warming to below 2 degrees.

But climate campaign group Market Forces, which investigates the investments of financial institutions, has analysed superannuation funds, including Hests, investments in fossil fuels.

“Hesta’s balanced growth option, its largest investment option had a total of $1.6 billion in these climate wrecking companies,” said Rachel Deans from Market Forces.

“When adding Hesta’s investments in these companies through its other investment options, the total would be around $2 billion.”

Thousands of school-goers have protested in recent times. Picture: Daniel Pockett/NCA NewsWire

This included $418 million combined invested in gas companies Santos and Woodside, alongside $2 million injected into Adani – the Indian giant behind the controversial Carmichael coalmine and rail project in Queensland.

Market Forces has a divestment day scheduled for June 17 where at least 100 Hesta members are expected to leave the fund over its fossil fuel investments, it said.

Climate change is increasingly becoming a key issue when it comes to financial investments.

After bushfires devastated Australia at the start of 2020, one superannuation fund saw a groundswell in new members as people voted with their wallets over climate change concerns last year.

Future Super, which focuses on zero fossil fuel investment, saw an almost 200 per cent increase in the number of members joining in 2020 compared to the previous year, growing to more than 30,000.

More people are voting with their wallets when it comes to action on climate change. Picture: Getty Images

Kirstin Hunter, CEO and co-founder of Future Super, said Aussies were looking for ethical finance options at a time when governments around Australia and the world seem to be stalling on climate change.

Superfund Australian Ethical has also urged workers to put their nest egg into a climate-friendly fund, reporting it had increased funds under management by 50 per cent or $2.02 billion in just one year, hitting $6.07 billion at the end of June 2020.

The Australian super industry manages over $3 trillion worth of assets.

Research from the Responsible Investment Association Australasia has found that funds which take an ethical and responsible approach have performed better than their peers over one, three, five and 10 years.

Originally published as Super fund Hesta faces backlash from school climate activists