Fossil fuel exposures climb at UniSuper

The $80 billion superannuation fund is more exposed to companies involved in fossil fuels than it was a year ago, according to its second annual climate risk disclosures released yesterday.

At June end, UniSuper had 12% of its exposures in companies involved in coal, gas and oil.

This is up from 18 months ago, when 8% of the fund's exposures were in fossil fuels.

The fund has holdings in Woodside Petroleum, Rio Tinto, BHP, South32, Santos, Origin Energy and Macquarie Bank among others. During the year to June end, it added TC Energy and APA Group to its holdings.

UniSuper said its exposure to fossil fuel was on par with MSCI World and lower than ASX 200 (which has 23%), and that it varies based on market movements and investment decisions.

"Illustrating the level of variability, at the time of writing (October 2019) we estimate our exposure to be around 9%," the report said.

"Exposure changes over 2018 included increasing holdings (largely as a result of favourable market movements) in APA Group (gas pipelines), Woodside (oil and gas producer), Aurizon (coal transport), Enbridge (US oil and gas pipelines, new addition to portfolio) and the exclusion of Rio Tinto and Wesfarmers following divestment of their fossil fuel divisions."

In August, UniSuper chief investment officer John Pearce said simply divesting certain holdings is not an effective strategy, at the FSC summit.

UniSuper is a signatory to the United Nations Principles for Responsible Investment and last year threw its weight behind the global Climate Action 100+, an investor initiative which aims to ensure the world's largest corporate greenhouse gas emitters take action on climate change.

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