So-called ‘Ethical’ super funds invest in coal, oil, gas

‘Ethical’ super funds invest in coal, oil, gas, SMH, Charlotte Grieve, March 3, 2020 Sustainable investment options offered by two major industry superannuation groups and wealth giant AMP have millions invested in the fossil fuel industry, despite pledging to apply strict screening based on environmental, social and governance standards.

AustralianSuper’s “socially aware investment option” claims it does not invest in Australian or international companies that directly own fossil fuels while disclosures of its portfolio holdings show it has at least $39 million invested in more than 20 global coal, oil and gas projects. These include Marathon Petroleum Corp, Indian thermal coal plant Adhunik Power and Natural Resources and oil, gas and chemicals company, WorleyParsons.

Latest figures show the fund has more than $2.4 billion invested on behalf of 38,000 members, less than 2 per cent of the $172 billion superannuation giant’s total membership pool.

After conducting a survey of members’ interests, the top investment concern for those wanting an ethical alternative was exposure to coal and other fossil fuels. The socially aware option pledges to screen out companies that own reserves of fossil fuels or uranium, regardless of the size of its ownership.

This screen is not applied to private equity, which makes up 4 per cent of total investments and the fund’s fact-sheet explains it can still invest in companies that provide services to, buy, process or sell products from or invest in the excluded companies.

The fund has a stake in 24 companies that either produce fossil fuels or rely on their production. These include: thermal coal producer Westmoreland Mining that in December announced a six-year coal supply agreement in middle America; $9.6 million in Halliburton, one of the world’s largest providers of drilling and production services for oil, gas and coal companies; and $9.6 million in Marathon Petroleum, the largest refining company in America that produces more than 3 million barrels of crude oil per day.

Other oil and gas companies AustralianSuper’s sustainable fund bankrolls include Fieldwood Energy, a company that claims to be one of the largest producers of oil and gas in the Gulf of Mexico, Perth-based Northern Oil and Gas and Ajax Resources, recently acquired by Texas oil and gas company, Diamondback.

AustralianSuper declined to answer questions about its screening process or if it had plans to create a fund that applies a hard screen to the fossil fuel industry.

Similarly, the 2019 portfolio holdings for $54 billion Hostplus’s sustainable investment option launched in March 2017 includes at least eight oil and gas companies, including Oil Search, Santos and Woodside Petroleum.

Hostplus was contacted for comment.

Giant retail super fund provider AMP’s $117 billion portfolio also includes an “ethical leaders balanced fund” that promises to “boycott the bad” by “actively avoiding” investing in fossil fuels, tobacco and nuclear power.

However, AMP invests in at least nine oil and gas companies, including Oil Search, Woodside Petroleum and Santos……. https://www.smh.com.au/business/banking-and-finance/ethical-super-funds-invest-in-coal-oil-gas-20200228-p545ja.html