We hear a lot about the so-called ‘green credentials’ of our superannuation funds. There are endless headlines and shouting from politicians decrying super funds divesting from ‘climate-wrecking’ initiatives like fossil fuel energy projects.

But new research has demonstrated all is not what it seems – and Aussies wishing to funnel their money into greener investments may be disappointed.

Fossil fuel investment still dominates

Research from environmental shareholder organisation Market Forces examining the investment portfolios of Australia’s top 30 superannuation funds has found there is five dollars invested in fossil fuel projects for every one dollar invested in clean energy.

Collectively, the top funds have more than $39 billion invested in coal, gas and oil companies and developments. This amount has more than doubled in the two years to December 2023, the research found.

There is only a comparatively small $7.7 billion invested in clean energy from Australia’s largest funds, which is a $500 million drop over the same period.

Market Forces found the funds most heavily invested in fossil fuels were UniSuper’s Balanced option (11.5 per cent invested in fossil fuels), Commonwealth Super Corp’s PSS Default (10.8 per cent) and MLC’s MySuper Growth option (10.4 per cent).

At the other end of the scaled, the fund options with least invested in fossil fuels were ESS Super’s Balanced option (6.6 per cent), Aware Super’s High Growth option (6.6 per cent) and NGS Super’s Diversified MySuper (6.7 per cent).

The findings show virtually all super funds have at least some money invested in fossil fuels, and fly in the face of previous claims by funds that they would begin reducing investment in fossil fuels, and ramping up investment in clean energy.

Members want change

Brett Morgan, superannuation campaigns manager at Market Forces, says a growing number of super fund members are demanding their funds take action on climate change, given the outsized role their funding can play.

“Investments in the world’s biggest climate wreckers are skyrocketing as Australia’s biggest super funds are failing to rein in dangerous coal, oil and gas growth,” he says.

“Tens of thousands of members are demanding immediate and decisive climate action from their super funds, by forcing coal, gas and oil companies to end their fossil fuel expansion plans and divesting where this fails.”

Interestingly, Market Forces went a step further and quantified the carbon emissions of more than 190 high-polluting companies and found that a shocking 59 per cent of emissions came from just three companies – gas giant Santos, Woodside Energy and Whitehaven Coal.

Are funds still greenwashing?

Super funds have also faced scrutiny in recent years of so-called ‘greenwashing’ claims – or promoting a fund’s more environmentally friendly investments while actively hiding less climate-friendly ones.

Despite the Australian Competition and Consumer Commission vowing to ‘crackdown’ on the practice of greenwashing, with threats of greater penalties, the data shows the practice still appears to be rife.

“Members are sick of seeing their super funds fooled by Woodside and Santos’ greenwash and want their retirement savings out of filthy companies sabotaging the clean energy transition,” Mr Morgan says.

“Thousands of members are furious that large funds including AustralianSuper, Australian Retirement Trust and HESTA are failing to rein in the climate-wrecking business plans of companies like Woodside.”

Does it bother you that your super fund invests in fossil fuels? Or are you more concerned with your fund’s return? Let us know in the comments section below.

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