Did you know your best ally in tackling climate change could be your super fund?

Collectively, Australian superannuation companies invest over $3 trillion of Australians’ retirement savings, giving them major stakes in every large company on the stock exchange. It also gives them enormous power to vote company directors in or out and demand accountability if the company fails to act on climate change.

As devastating bushfires, floods and heatwaves have made the costs of climate change clearer, superannuation funds and other investors have significantly increased pressure on big corporate polluters whose business plans threaten the wellbeing of society as a whole and the retirement years of their members.

By encouraging your superfund to push for climate action, you’ll be helping to protect the places we love.

What can super funds do for the planet?

As part-owners of the companies they invest in, superannuation funds have a range of rights and tools they can exercise if those companies fail to manage risks to the world and thereby the economy that sits within it, including climate change. These include:

  • Supporting or filing shareholder resolutions on climate transition plans
  • Pre-declaring their voting intentions
  • Public advocacy
  • Voting for or against company directors
  • Voting against director’s pay, which can ultimately trigger a special meeting for the re-election of the entire board
  • Filing litigation

Recent events have shown that when investors like superannuation funds collaborate, they can make a significant difference in driving down emissions.

In 2021 a record 55% of shareholders in AGL – Australia’s biggest emitter – voted to require the company to produce a plan to reduce its emissions in line with the Paris Agreement to limit warming to 1.5 degrees. The company originally intended to keep burning coal until 2048 and had few renewable ambitions.

The following year, AGL irresponsibly tried to split the company in two (separating its coal power plants from other business) but were blocked by shareholders, including super funds. Several board members and the CEO were forced to resign, and the company shifted course, bringing forward coal closure by thirteen years, avoiding 200 million tonnes of greenhouse gas emissions – more than a third of Australia’s annual emissions.

Woodside has also faced significant pressure, with 49% of its shareholders rejecting the company’s climate strategy in 2022 on the grounds that it was not strong enough, and nearly a third voting against its longest-serving board member this year, in a rebuke to the company’s failure to tackle climate change.

Globally, the number of shareholder resolutions on climate change increased by two-thirds last year, with nearly half withdrawn after companies increased their ambition to avoid embarrassment at their annual general meetings.

How are Australian super funds tracking?

Superannuation funds have a responsibility to protect the interests of the millions of members who entrust them with their retirement savings, including making sure their investment choices don’t create a climate that’s unsafe to retire into.

While increased pressure from super funds on big polluters is encouraging, there are clear leaders and laggards in how seriously they are pushing companies to change course.

Some funds like HESTA have begun publicly declaring how they will vote ahead of company meetings, increasing public pressure on big polluters and the likelihood that votes will succeed. But it’s rare for most superannuation funds to do the same.

Other funds, like Vision Super, have been filing their own climate resolutions. For example, in 2019 Vision Super co-filed a resolution asking the world’s largest mining company BHP to suspend its membership of industry associations lobbying against climate policies. The 22% vote in favour concerned BHP so much that they initiated a review of industry associations and ultimately quit the Queensland Resources Council due to its anti-climate lobbying. And earlier this year, they co-filed a declaration calling for the removal of board members in Woodside. Investor-filed resolutions can have a big impact, but so far they are less common in Australia than overseas.

Some funds disclose their votes in near real-time along with their reasons for voting a particular way and the outcomes of those votes, yet a handful of funds are not transparent with their members on how they represent them.

Ultimately, super funds need to reassure their members that they will not allow company directors at big polluters to stay in their roles while they approve new coal and gas projects and put our long-term interests at risk.

Read more about how your superfund stacks up on disclosure and voting practices to protect Australia’s climate.

The climate crisis requires all of us to work together to stand up to polluters and back in solutions. We cannot solve the problem by passing the buck onto someone else. Super funds need to match the scale of the crisis with the bold leadership required, and be clear with their members about how they will act.

Super funds are accountable to them and have proven to be responsive to member pressure calling for strong action on climate change. As a member of your super fund, you have the power to call on your super fund to set strong climate targets and use their influence to force the biggest polluters to drive down emissions.

If you’re a member with Australian Retirement Trust (a merger of QSuper and Sunsuper and now one of Australia’s biggest funds), call on your superannuation fund to show integrity in becoming the climate leader it claims to be by signing our petition.

Jonathan Moylan

Corporate Campaigner, ACF