An Open letter to Telstra Super on fossil fuel investments, particularly Santos and Woodside Energy

The following email to one of my superannuation funds, Telstra Super, was partly generated from the latest Market Forces Climate Wreckers Report. It is easy to generate a letter with specific information to your Super Fund. I added substantially more contextual information to my email. But a short personal note with reasons on the necessity for divesting for our future can also have an impact. 

Every Super member has an opportunity to change how their superannuation is invested, divesting away from fossil fuels to clean energy solutions.

To TelstraSuper,

Time to End all investments in the world’s worst fossil fuel expanders

I’m contacting you to demand that you end the fossil fuel expansion plans of companies you invest my retirement savings in, and publicly divest from them if this fails.

I have particular concerns that your engagement with Woodside and Santos to adopt a change in business, has failed. These companies are almost entirely dedicated to Fossil fuel production and expansion. Your continued investment of member superannuation money  in these companies under the rubric that you can engage and get them to adopt net zero emissions by 2050 is fatally flawed and is not in keeping with your fiduciary duty to act for members long term behalf.

Divestment: Local Government Super add negative filter for coal

Local Government Super, an industry superannuation fund covering local government workers in NSW, has announced increased negative screening for high carbon assets such as coal mining and coal power generators, specifically citing the impact of climate change for this decision.

The additional negative screening will exclude companies from its portfolio with a material exposure to ‘high carbon sensitive’ activities such as coal and tar sands mining, as well as coal-fired electricity generators. The threshold for this screening has been set at a minimum of one third of company revenue.

The Super fund has used negative screening since 2000 regularly reviewing this policy and it's application. The policy has limited investment with companies involved with tobacco, gambling, armaments and old growth forests, as well as excluding companies with poor management of environment, social and governance (ESG) risks.

Local Government Super has about $8 billion in investments. The policy will mean about $25 million will be divested from various mining and energy companies, including $15 million in shares of AGL Energy and Whitehaven Coal.

HESTA Super Fund restricts thermal coal investments

The first major Australian industry superannuation fund advised on Friday they were restricting thermal coal investment due to the growing risk of 'unburnable carbon' with the growing global push to limit global warming.

HESTA, the super fund for employees in health and community services, announced a progressive implementation of a restriction on investments in thermal coal, across all it's funds, not just it's ethical fund. HESTA has $29 billion under funds management with 785,000 members and 155,000 employers.

Anne-Marie Corboy, HESTA Chief Executive Officer, said that this was an increasing restriction as part of the Fund’s ongoing response to the increasing impact of climate change on its long-term investments. In a media statement she commented:

“This ‘unburnable carbon’ is likely to become an increasing risk in the medium to long term, especially for companies heavily invested in thermal coal, or those seeking to develop new long-term assets.

“HESTA is of the view that, new or expanded thermal coal assets face the highest risk of becoming stranded before the end of their useful life.

“It is not prudent, nor in the long-term interest of members, to invest in the expansion of these assets.

“The push to limit the impact of global warming requires economies to move to a lower-carbon intensive future and investors have an important role to play in this transition.

“HESTA believes that further investment in developing new, or expanding existing, thermal coal reserves is inconsistent with this imperative to reduce carbon emissions.”

Your Superannuation is Destroying the Planet - John Hewson fights back on climate

Superannuation for most of us is compulsory saving that we really don't worry too much about until we start getting closer to retirement. We leave it to the investment managers and superannuation trustees to judge the benefits and risks in investment strategies they put forward.

But what if their assessments of risk and investment strategies are all short term market oriented or only consider past trends. This is the problem posed by climate risk and the carbon bubble. The carbon bubble represents a major shift in resource exploitation and energy production, and a social and technological transition required. Australia's headlong rush for coal expansion risks stranded assets. The economic risks of a carbon bubble and stranded assets have been warned by Carbon Tracker, PriceWaterhouseCoopers (PwC) and International Energy Agency (IEA).

Global pension funds control about $30 trillion in assets. It is estimated that over 55 per cent of pension contributions are invested in high-risk, high-carbon assets with less than 2 per cent being invested in low-carbon assets.

With climate change science indicating that 80 per cent of known fossil fuel reserves need to be left in the ground to maintain a safe climate, there is an enormous carbon bubble of overvalued assets. This poses a huge problem: when this carbon bubble bursts it will substantially downgrade the value of these superannuation investments, that is, your and my future retirement income.