My fund isn’t listed, what can I do?
Get in contact, and we will try to add it. Alternatively, visit the fund’s website and search for top holdings or investments; most funds provide at least the top 10 shares held.
My fund doesn’t disclose their holdings, what can I do?
Ask your fund to disclose by completing the action “Tell your fund to disclose all their holdings” on the fund’s page.
Until disclosure becomes mandatory in Australia, we are working with limited information and rely on what is made publicly available or information the fund provides directly to us and we presume on good faith that it is accurate.
Should I switch my fund or keep pressuring my current fund to divest?
This is your choice, but if you are considering changing funds it is important that you seek independent financial advice. If you’re financial planner is not attune to your investment values, the Ethical Advisers Co-op provide financial advice through a responsible investment lens.
The aim of SuperSwitch is to shift investments out of fossil fuels and while some people may choose another fund that aligns better with their fossil fuel free values, we would like to see all super funds reducing their exposure to companies and projects that harm the environment and climate.
I can’t change my fund, what can I do?
If you are forced to have a super account with a particular fund because of your workplace’s enterprise bargaining agreement, you should first of all check that the clause about where your super is placed is restrictive or just prescriptive. You might wish to engage with your union representatives the next time your enterprise agreement is negotiated to change that clause.
But in the meantime, this should be even more reason for your fund to respond to the concerns of its members. You can work with your colleagues in your workplace and across your industry to call on your fund to divest from fossil fuels.
I manage my own super, which companies have the most exposure to fossil fuels?
Market Forces provides a list of all companies with direct or indirect exposure to the fossil fuel industry. We classify all companies in the S&P ASX300 index, and the MSCI All Countries World ex Australia index. Please refer to our companies page to see how they are classified.
Can one person really make a difference?
Market Forces invests a lot of time in communicating and engaging with members of all funds, so you are certainly not alone. From our conversations with super funds, it is clear that most do listen to members, and will take action if enough members contact them about any issue.
What more can I do?
Tell your friends, family and most importantly colleagues about SuperSwitch. If you’re in a union, ask your delegate to raise fossil fuel divestment at the board level. If enough union members think it’s a problem, then union delegates at industry super funds will act.
My colleagues are invested in the same fund, do you have materials I can provide them?
Send them the link to the fund page showing their investments in fossil fuels. If you’re after something more detailed, check Latest News for stories on the fund. Alternatively, contact us and we’ll see what more information we can provide.
I’m in an ethical/sustainable fund, how ethical/sustainable is it?
Ethical or sustainable funds vary greatly depending on their strategy and whether or not they apply restrictions on investments in specific sectors or companies. In addition to fossil fuels, ethical or sustainable funds may restrict investments in alcohol, gambling, munitions and tobacco. Furthermore, other companies that don’t act responsibly, as determined by the fund, may also be ruled out.
Many funds claim to be ethical or sustainable, but in reality their holdings are not too dissimilar from funds that don’t make those claims. The Responsible Investment Association of Australia (RIAA) is a valuable source of information on responsible investment. This article in the Australian Financial Review from 2014, explains the difficulties in comparing options.
Have you contacted your fund? Did your fund provide you a list of reasons not to divest? Here are some responses to the most commonly heard arguments against divestment.
Divestment is too simplistic, it doesn’t work.
Divestment in and of itself is simplistic, and we do not recommend super funds divest themselves from dozens of stocks overnight without due consideration. However, the stocks which we do recommend super funds divest from immediately, constitute a relatively small part of the index (approximately 4% in Australia & 6% internationally).
It is also important to note that divestment isn’t just about isolating the fossil fuel industry financially, but isolating them politically too. Divestment helps to stigmatise fossil fuels by reducing the political power of the coal, oil and gas companies, thereby making good government policy more likely.
We prefer engagement rather than divestment.
Market Forces encourages super funds to engage with those companies whose businesses can be restructured to be compatible with a post-carbon economy. “Pure play” fossil fuel companies – those that do nothing else but explore, produce or refine fossil fuels, are not likely to form part of this future economy. For diversified companies where fossil fuels make up a small part of their businesses, engagement is the suggested approach. However, engagement without teeth, that is – the threat of divestment or some other punitive action – is meaningless. If diversified companies are not actively taking steps to reduce their exposure to fossil fuels, then investors must seek change at board level, or ultimately divest.
We apply our ESG policy to our portfolio.
Super funds often state that their Environmental, Social and Governance (ESG) policy is sufficient for tackling climate risk. ESG policies vary widely between funds, and usually consider the relative performance of companies against a set of environmental, social and governance criteria without necessarily resulting in the exclusion of companies whose operations are clearly incompatible with a low carbon future.
The strength of an ESG policy is entirely determined by the super fund itself. So while one fund’s policy may exclude high carbon emitting companies, others may not. Unless your super fund can explicitly state how their ESG policy will reduce emissions over time, with specific examples and benchmarks, then its unlikely that it will.
We have a duty to provide the best return for members.
All super funds have a duty to provide the best return for members. However, responsible investment and financial returns are not mutually exclusive. RIAA’s latest Benchmark Report found that “core responsible investment Australian equities funds outperformed both the ASX300 and the average large cap Australian equities funds across one, three, five and 10 years.” Additionally, Corporate Knights’ analysis of 14 major institutional investors, including Australia’s Future Fund, found that not reducing exposure to fossil fuel companies had a detrimental effect on returns over three years.
We are generally underweight in high carbon emitting stocks.
If super funds claim to be holding less of a stock than is represented in an index or by their peers, then they should prove it to members by disclosing as much of their portfolio as possible. They should also measure and report the carbon intensity (tonnes of carbon emitted per million dollars invested) of their portfolio; and commit to a carbon intensity target.
We are not the worst.
If super funds claim to be “not the worst”, then they must demonstrate that through disclosure and reporting of carbon intensity. This kind of assertion is very subjective, and made with very limited information. Most super funds don’t disclose their aggregate fossil fuel exposure or report carbon intensity, making comparisons difficult.