Super funds warned to put low energy prices ahead of lower carbon targets

The Morrison government warns super funds not to put carbon targets before low prices.

Energy Minister Angus Taylor speaks at the National Innovation Centre today. Picture: Brett Costello

The Morrison government is warning superannuation funds not to put ambitious carbon reduction targets before low energy prices and the interests of retirees.

IFM Investors — the owner of Australia’s biggest energy network, Ausgrid — announced yesterday that it would put emissions reduction targets of up to 100 per cent on major asset holdings.

The move is unlikely to hit energy consumers as IFM’s decision will not affect any investments in baseload power generation or storage projects, but it has still raised questions about industry funds’ climate activism.

Energy Minister Angus Taylor said today that private funds were free to make carbon reduction decisions, but warned he did not want any costs passed on through power prices.

“The government welcomes positive industry action to reduce emissions and protect the environment,” he told The Australian.

“However, corporate decisions that impact the energy market and do not include responsible plans for firming and storage, will simply pass on the costs to consumers who can least afford it.”

The $140 billion IFM Invest­ors, chaired by former ACTU head Greg Combet and co-owned by 27 of the biggest industry super funds, including Aust­ralianSuper, Hostplus and Cbus, also controls or has large stakes in assets such as the Port of Brisbane, Southern Cross Station in Melbourne and Northern Territ­ory Airports.

Emissions reductions targets of up to 100 per cent by 2030 will be slapped on a broad range of infrastructure assets across the nation, including the Ausgrid electricity network, Melbourne and Brisbane airports, and NSW Ports.

The emissions reduction targets will be largely met by improving energy efficiency, with methods including more energy-efficient street lamps and putting more solar panels on its buildings.

The government has been critical in recent months of industry funds which have taken up social and environmental activism.

Assistant Minister for Superannuation Jane Hume said today that super funds had to put boosting members’ income first or face regulatory consequences.

“As APRA Chair Wayne Byres said in March of this year in response to a letter from the Treasurer raising concerns about activism at the time: ‘Any evidence of trustees potentially giving priority to anything other than members’ interests and the provision of retirement incomes would be of concern’,” she said.

“Since then, the Morrison government has passed legislation that ensures even greater transparency and further strengthens regulator powers to take action against trustees of superannuation funds who breach their obligations to members.”

“It is vital that members have confidence that their money is being invested solely to maximise their retirement income.”

IFM Investors’ environmental moves come as a wider debate brews within government ranks over superannuation reform, with some MPs wanting to end compulsory super.

Leading super reform advocate and NSW Liberal senator Andrew Bragg said today that trustees were responsible for ensuring members came first and that tighter regulation was needed.

“If there is a view in the community that funds are working for a vested interest, not for workers, that would undermine the system,” he told The Australian.

“Super trustees are on the hook. They must be investing to maximise retirement outcomes for members, not political or economic vested interests.”