Fossil fuel divestment campaign ups ante with move-your-money campaign aimed at Oz super funds

New site Super Switch compares super funds’ carbon exposure

The global fossil fuel divestment campaign is targeting the AUS$1.8trn (€1.27trn) mandatory Australian pensions market with a website that encourages savers to compare the carbon exposure of the investments of their superannuation funds and move their money or lobby the fund directly. The new site, Super Switch, launched today (September 2), has an initial list of 35 of the largest Australian superannuation funds with publicly available information on their carbon holdings. It encourages superannuation scheme members to shift their assets to a fund with a lower carbon exposure or to e-mail their existing provider calling on it to divest fossil fuel companies. Other campaign options proposed by the site include asking the superannuation fund for a fossil-free index or requesting more transparency on the carbon exposure of the companies held by the fund. The site is a new consumer choice driven development in the push for pension funds to sell their fossil fuel holdings or lower their CO2 emissions based on the two degrees target agreed by governments at the 2009 Copenhagen Climate Summit to avoid risky climate change impacts.
Super Switch is run by Market Forces, an affiliate of Friends of the Earth Australia, and is supported by, the US NGO that has been pushing the fossil fuel divestment campaign. It is funded by the Wallace Global Fund, a US foundation set up in memory of Henry Wallace, the former Secretary of Agriculture and Vice-President under Franklin D. Roosevelt. The funds listed on Super Switch represent about 75% of the total Australian managed super funds industry and the campaign says it will add more fund information as it can get it. Super Switch’s figures are based on the funds’ equity holdings, which amount to about AUS$400bn in total, although nine of the funds make no disclosure according to the site.
Super Switch reports on each funds’ exposure as a percentage of its total equity holdings to three tiers of companies: tier one companies that are direct fossil fuel companies or critical to the industry, tier two companies that derive a significant portion of their revenues from the support of fossil fuel extraction, and tier three companies that are smaller service providers to the industry such as finance or engineering companies. It also reports the percentage of a fund’s total ‘fossil free’ exposure.The divestment issue is becoming increasingly polarised in Australia, especially regarding the country’s huge coal industry.
This week, Australia’s third largest Christian denomination, The Uniting Church in Australia, passed a resolution to divest its assets from fossil fuel companies. Last week, Paul Flynn, Chief Executive of Whitehaven Coal told The Australian Financial Review that the coal industry should fight harder against the global fossil fuel divestment campaign after The University of Sydney, a shareholder in Whitehaven Coal, said it was stopping further investments in coal mining. Flynn labelled the divestment campaign as “green imperialism at its worst”.
Speaking at the launch of Super Switch, Bob Welsh, former CEO at the AUS$13bn VicSuper fund, said it had trialled a carbon lite portfolio back in 2006 looking at the world’s top 1500 companies worldwide with a view to getting the same return with a 50% lower carbon exposure: “We proved to ourself that we could do this. There are many things that super funds can do such as engaging with companies, investing in climate solutions and advocating for a price on carbon with policy makers. It’s complex but definitely possible to get portfolios that are substantially less carbon intensive. But super funds do need to hear the voice of their members to start doing this and Super Switch is a great initiative to this end.”
Simon O’Connor, Chief Executive of the Responsible Investment Association Australasia (RIAA), said: “Pressure on super funds is certainly rising in Australia with the past year seeing a rapid increase in members engaging with their funds on issues from fossil fuels, tobacco, asylum seeker detention centres, human rights and many more issues. This is a trend that is unlikely to go away, with increasing scrutiny on super funds, but which is also starting to drive an increase in demand for responsible investment options. Our recent Responsible Investment Benchmark Report found that public demand for responsible investment options has increased to its highest level in a decade.”