Market Forces finds super funds boosted stakes in ‘climate wrecking companies’ by $34bn in 2022

Australia’s 30 largest superannuation funds have increased their exposure to industries with high greenhouse gas emissions, environmental lobby group Market Forces claims.

Australia’s 30 largest superannuation funds have increased their exposure to industries with high greenhouse gas emissions, despite many commitments to net zero, environmental lobby group Market Forces has claimed.

In a report published on Monday, Market Forces warns the 30 biggest retirement funds in Australia increased their fossil fuel-exposed investments by $34bn in 2022.

Market Forces said the exposure to new coal, gas or oil projects increased by nearly 50 per cent in the default investment options offered by these 30 funds in 2022.

Market Forces said almost 9.3 per cent of investments across these 30 funds were in “climate-wrecking companies”.

Market Forces estimates total fossil fuel exposure of almost $140bn across the Australian retirement sector. This equates to an average $6100 invested per member account.

Market Forces campaigner Brett Morgan said super funds were “making a mockery of their own commitments to net zero”.

He said the strategy of “buying up wholesale in companies expanding in fossil fuels and letting them get away with trashing our climate” stood at odds with the industry’s stated strategy.

“Australia’s super sector is collectively responsible for threatening members’ safety in retirement with a whopping $140bn gamble against a stable climate future,” Mr Morgan said.

The Market Forces analysis acknowledges a rapid rise in valuations by energy-exposed industries after the Russian invasion of Ukraine in February last year.

“Although this can explain in part why the average super fund’s exposure to the Climate Wreckers Index has increased over the past year, our analysis has also identified some super funds buying up big in the worst of the worst companies,” Market Forces said.

Of the 30 funds, 22 have set net zero by 2050 or sooner emissions targets, but Market Forces says almost all lifted their investment exposure to the 190 “climate-wrecking companies”, including Woodside, Santos, BHP, Whitehaven, ExxonMobil and Adani.

“This means that, despite their emissions targets, funds are often failing to take the immediate action required to facilitate a net zero emissions outcome or achievement of the Paris Agreement’s climate goals,” Market Forces said in its report.

Market Forces says retail super funds are “over-represented” among the most exposed group.

Commonwealth Super Corp was identified in the Market Forces analysis as the worst offender, with 11.5 per cent of its total investments in identified companies. This was followed by MLC MySuper Growth with 11.4 per cent of its assets, and Russel Investments – Goal Tracker with 11 per cent, in the identified companies.

The Market Forces analysis found the NGS Super Diversified Super fund had the lowest exposure of the 30 funds scrutinised by the lobby group’s analysis with 6.4 per cent of assets.

This was followed by Super SA – Triple S Balance, with 6.8 per cent, and the Cbus – Growth option with 7.2 per cent of assets in the identified companies.