‘Not adequate’: SunSuper, QSuper members criticise funds’ climate policies

More than 200 QSuper and SunSuper members have accused the funds of lagging behind peers on climate change and have called for full transparency of their investments and formalised net zero emissions targets.

The two superannuation funds agreed to merge this month, creating a $200 billion giant that will challenge AustralianSuper for the title of the country’s largest super fund with its $210 billion in assets under management.

QSuper has no formal commitment to achieve net zero emissions across its investment portfolios as other major players such as Hesta, Cbus and UniSuper have done, and no plan to phase out ownership of emissions-intensive industries such as thermal coal.

Major super funds are turning their backs on thermal coal and committing to net zero emissions targets. Credit: Sanghee Liu

While SunSuper has committed to achieving net zero emissions by 2050, recent disclosures show the carbon footprint of its listed equities portfolio is higher than that of the broader stock market, and the fund has not articulated how this will be reduced.

SunSuper launched a “Climate Action Plan” last June, but has not made this document publicly available, claiming it is commercially sensitive. The fund also claims to have “established 27 actions” to achieve decarbonisation, but has similarly not disclosed what these actions are.

A SunSuper spokeswoman said the plan was based on “detailed research” and included consideration of carbon budgets, stock divestments and investment exclusions. “We believe publishing our CAP publicly, prior to the execution of our investment decisions, would likely prejudice our efforts to maximise retirement outcomes for members.”

The members sent a letter to both funds calling for the merged entity to drastically ramp up climate policies by providing full disclosure on their portfolio holdings, stronger commitments to net zero emissions targets and greater accountability for decarbonisation and shareholder activism.

“We are QSuper members and concerned that QSuper is not adequately taking climate change and its associated risks into account when making investment decisions concerning our superannuation,” the letter, obtained by The Age and The Sydney Morning Herald, said.

“As QSuper members, we are entitled to documents and information about how the fund is investing our money, the fund’s investments, and how the fund is being managed, including the management of financial risks.”

A similar letter was sent to SunSuper, which also details 17 shareholder proposals the fund voted against last year - including one proposal at oil and gas company Woodside to slash emissions and link executive pay to achieving bold new targets, which saw record-breaking investor support.

A SunSuper spokeswoman said each proposal was considered on merit, and proposals are rejected if they request actions that are outside the control of management or are poorly drafted.

The merged fund will be led by SunSuper chief executive Bernard Reilly and headquartered in Brisbane. Both parties are still negotiating the merged organisation’s structure and operations.

QSuper member Emma Gilbert, who signed the letter, works as a general practitioner in Queensland’s Hervey Bay and was defaulted into the fund as a young doctor in 2009. Dr Gilbert said there was a “real opportunity” for the merged fund to be a leader on climate change.

“They’re looking to become the biggest super fund in Australia and if they can look at meaningful action on climate change, that’s a massive way forward for Australia,” she said.

“Considering our money is there for our future, they should be investing in technology that’s helping our future, not degrading it.”

QSuper member Emma Gilbert

“QSuper essentially doesn’t have a climate policy at the moment … We’d like them to commit to divestment of fossil fuels and a net zero target. If not, we’d like them to explain why? Considering our money is there for our future, they should be investing in technology that’s helping our future, not degrading it.”

Both funds said portfolio holdings will be disclosed once required by law next year, however this legislation has been pushed back since it was first introduced in 2012.

QSuper released a statement in December claiming it would review its portfolio to quantify carbon exposures and would consider going “as far as potential divestment or non-investment”. QSuper also said it was “aiming” to allign with the Paris Climate Agreement which “implies support” for net zero emissions by 2050, but made no formal commitments.

A spokesman said QSuper was “formulating an approach to environmental matters which will match or exceed best practice” but added the merged entity would determine its future climate policy.

Last year saw unprecedented pressure on the superannuation industry, after The Age and The Sydney Morning Herald exposed the sector’s ongoing investments fossil fuels, despite pledges to embed climate concerns in investment strategies.

A series of member-led protests saw major funds ramp up climate policies, formalising net zero emissions targets across investment portfolios and laying out plans to divest from thermal coal and other heavy-emitting industries.