Super giants funnel billions into fossil fuels, vote down climate push

Four of the nation's biggest industry super funds have billions of dollars invested in coal producers and other fossil fuel companies despite taking a vocal stance on climate change and pledging to support emissions reduction.

Research exclusively obtained by The Age and The Sydney Morning Herald also shows support among super funds for shareholder resolutions that would force companies to take tougher action on climate change has fallen.

Four major industry funds also invest in coal, oil and gas. Credit: Bloomberg

UniSuper, Hostplus, HESTA and AustralianSuper have significant investments in the global coal, oil and gas sectors, public disclosures show.

Unisuper, a $85 billion fund that has more than 450,000 members largely from the university and research community, said it had no plans to divest its $170 million investment in 14 thermal coal companies nor the $7.82 billion it had spread across 13 gas, oil and petrol companies, including Santos, Woodside Petroleum and Australian Oil and Gas.

AustralianSuper, a $170 billion behemoth, has investments in at least three coal miners – Whitehaven Coal, BHP spin-off South32 and New Hope, which has two open cut coal mines in South East Queensland, according to disclosures. It also has money in eight oil and gas companies including China Gas and China Petroleum and Chemical Corp, whose parent company has been prosecuted for chronic pollution cases and multiple deadly pipeline explosions. AustralianSuper declined to comment on the investments.

Hostplus, a $54 billion fund with members largely from the hospitality and tourism industries, has investments in 26 oil and gas companies, including offshore stocks such as Abu Dhabi National Oil Company, the twelfth largest oil company by production in the world, and eight producers of thermal coal, including local players Whitehaven Coal, New Hope and South32.

"Our ownership of shares in these companies gives us the ability to engage and influence. Selling our holdings would deprive us of this important right," Hostplus chief executive David Elia said in an emailed statement.

A $50 billion fund representing healthcare workers, HESTA, has money in Coal India, a company that boasts of being the "single largest coal producer in the world" and that operates 83 mines and produces 83 per cent of India's overall coal output.

It also has investments in at least 12 oil and gas companies, including Oil Search, Santos and China Gas.

"We believe that if all we do is simply sell these companies, it is very unlikely to change their behaviour and drive long-term climate action," HESTA chief investment officer Sonya Sawtell-Rickson said.

'Our ownership of shares in these companies gives us the ability to engage and influence.'

Hostplus chief executive David Elia

While the super funds claim to remain invested in order to influence change, analysis by the Australasian Centre for Corporate Responsibility shows the number of climate-related shareholder proposals rejected by Australian super funds, both not-for-profit industry funds and for-profit retail funds, is on the rise.

The research looked at 135 climate-related shareholder proposals voted on by 50 of the country's largest super funds and found, overall, the number of proposals approved had fallen by 4.2 per cent since last year, with AustralianSuper and UniSuper voting against all domestic proposals in 2019.

AustralianSuper rejected all 11 proposals, including a move to mandate Rio Tinto's disclosure of its transition plan from coal and another to stop BHP lobbying deemed inconsistent with goals of the Paris Agreement. UniSuper supported 95 per cent of climate proposals internationally, but voted against all those put forward in Australia.

The centre's director of climate, Dan Gocher, said the funds were confusing "access with influence".

Mr Gocher also noted the for-profit retail sector was far less transparent, failing to disclose where members' money was invested and voting records at annual general meetings.

"ANZ and IOOF are terrible ... there are very few funds that disclose their entire portfolio."