Super funds under growing global pressure to divest
Thursday, 24 September 2015 12:23pm

Funds worth $3.3 trillion have divested from fossil fuel only in the last year. Fossil free activists are not "crazy loonies," but a well-coordinated global movement that is now targeting Australia's superannuation funds.

Go Fossil Free, a divestment campaign led by global climate movement 350, has significantly grown its presence in Australia over the last year and is actively targeting super funds and the big four banks.

Campaigners have set up a website, Super Switch, where members can check their super fund's exposure to fossil fuels and switch to a greener one.

Through a similar tool for banks, Go Fossil Free calculates that about $450 million has moved from the big four banks to fossil fuel free banks in Australia.

The divestment campaign started in July 2013. "We started focusing on small institutions such as city councils or local churches," campaigns director Charlie Wood said.

But over the last year the global divestment movement has gained momentum on the back of falling coal prices and the effects of climate change being felt all over the world.

A global report by Arabella Advisors quoted by the campaign shows that fossil fuel divestment has grown 50-fold over the last year, with institutions divesting managing about $3.3 trillion (US$2.3 trillion)

In Australia, "we have had quite a mixed reception from super funds, but there has been a very interesting evolution from being seen as crazy loonies to a general agreement that coal is a bad investment," Wood said.

She explained that institutional investors are overall more receptive, want to have an appreciation of the stranded assets in their portfolio and are aware of the reputational risk as their own members question them on their exposure to fossil fuels.

Go Fossil Free campaigners are engaging with super funds directly, but also encouraging members to "push for positive climate action."

A number of super funds have recently reduced their exposure to fossil fuels, a sign that the debate and public perception around the issue has significantly shifted since the Australian National University (ANU) caused national outrage when it decided to pull $16 million from resources companies.

Since then, Local Government Super (LGS) completely divested from coal, First State Super's socially responsible investment options are fossil fuel free and Future Super, Australia's only fossil fuel free super fund, has gained 3,000 members since it was founded in September 2014.

Wood said that more divestment announcements are expected from super funds as pressure mounts ahead of the UN Climate Change Conference, to be held in Paris in December.

"Given the vacuum of political leadership on climate change in our country, the investment community is increasingly seeing this as a space for them to fill in those gaps," Wood finished.

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