Activist investor group Market Forces alleged that Australia’s five largest pension funds were not doing enough to push fossil fuel companies toward decarbonization, as reported by Reuters on March 15. The five schemes, including Australian Super, Commonwealth Super Corp, Australian Retirement Trust, Aware Super, and AMP, together manage over AUD1tr (USD668bn) in savings. Market Forces claimed that these super funds failed to use their influence to promote climate action in the fossil fuel companies they invest in. Moreover, their ambitious environmental commitments were deemed greenwashing, as they had not demonstrated “effective engagement” in climate action.

This criticism came amid Australian regulators’ crackdown on greenwashing. On February 28, the Australian Securities & Investments Commission sued pension fund Mercer Superannuation Australia over misleading investors in the marketing of some sustainable products, representing the first court action over sustainable claims by the regulator. Given the AUD3.4tr (USD2.24tr) pensions industry’s support for Australia’s fossil fuel companies, the sector is facing growing pressure to ensure their green claims are accurate and substantiated. UniSuper, an AUD115bn (USD75.9bn) Australian pension fund, recently removed a 16-page section containing its assessment of the impact of emissions by the 620,000 members it invests in from a climate risk report published last September. Meanwhile, UniSuper’s smaller counterpart, Active Super, also deleted its 70-page online Responsible Investment Report. According to a spokesman for Active Super, the fund noted the increased regulatory focus on environmental, social, and governance (ESG) disclosures and was reviewing all ESG-related materials on its website.

Sources: 

https://www.reuters.com/business/sustainable-business/australias-biggest-pension-funds-not-doing-enough-climate-activist-investor-says-2023-03-15/

https://www.afr.com/policy/tax-and-super/super-funds-failing-to-engage-with-fossil-fuel-companies-on-net-zero-20230314-p5crvq

https://www.bloomberg.com/news/articles/2023-03-09/pages-removed-from-pension-fund-reports-show-climate-data-hazard

https://www.bloomberg.com/news/articles/2023-02-27/australia-watchdog-sues-mercer-pension-fund-for-greenwashing