‘Money still flowing’: Activist group finds super funds pour $34b into new fossil fuel projects

Environmental activist group Market Forces has rubbished Australian superannuation funds’ claims they are acting against global warming after it found 30 major super funds poured more than $30 billion into “climate-wrecking” companies last year, contradicting net-zero targets set by many of the super funds themselves.

The country’s 30 biggest super funds lifted their annual allocation to fossil fuel companies by nearly 50 per cent, up by 9.3 per cent on average last year from 6.3 per cent in 2021, Market Forces’ analysis revealed. The increase is despite 22 of those 30 super funds having set a target of achieving net-zero emissions by 2050 or sooner.

The total sum of money invested by the 30 super funds as a result of exposure to at least some of 190 fossil fuel companies totalled $34.2 billion last year. Market Forces acting executive director Will van de Pol accused superannuation funds and the index of companies of greenwashing.

“What this analysis does is allow people to get past the high-level statements and climate commitments and actually understand where the money is flowing. And it reveals that money is still flowing to companies expanding the coal, oil and gas sectors when we know we need to rapidly transition away from these industries if we’re to limit global warming to 1.5 degrees,” he said.

The list of 190 companies, dubbed the Climate Wreckers Index by the activist organisation, comprises publicly listed global corporations expanding new projects in oil and gas, coal mining, and liquefied natural gas that will produce a combined volume of emissions equal to 230 years of Australia’s annual emissions.

The worst-offending super fund was Commonwealth Super Corporation, which invests for government and Defence Force personnel. It increased its exposure to new fossil fuel projects by 11.5 per cent, followed by MLC’s MySuper Growth (11.4 per cent) and Russell Investments’ Goal Tracker (11 per cent).

Retail funds, or for-profit super funds, generally performed worse than their not-for-profit industry fund peers. Just seven of the 30 funds in the study were retail funds, but four of them were in the top 10 list of funds most exposed to the Climate Wreckers Index.

The report also singled out Australia’s largest super fund, AustralianSuper, for increasing its investment in oil, gas and petroleum producer Woodside Energy 18 times in 2022. Part of this was because of Woodside’s acquisition of BHP’s petroleum business, which saw every BHP investor issued Woodside shares. But even taking those shares into account, AustralianSuper increased its investment by “tens of millions” of shares, van de Pol said.