The latest data on VicSuper’s investments show that the super fund has divested from coal companies….almost!
In other words, the likes of Whitehaven Coal and New Hope Corporation and any other companies whose primary business is coal mining have been largely sold off; while diversified miners like BHP Billiton and Rio Tinto remain. It is not clear over what period the sell-off has taken place. VicSuper’s coal company holdings are now well below $1 million, a small amount for a $16 billion fund.
Despite the crash in the value of coal companies over the last three years, VicSuper’s current holdings represent a deliberate sell-off.
Tell VicSuper to never invest in coal again, and take the next divestment step
An interesting question is how the coal sell-off came about. VicSuper have not made a public statement, nor provided any justification for abandoning coal. Market Forces reasons that there are two ways VicSuper could have excluded coal. The first would be an active decision by investment managers to not hold the stocks – not unlike those decisions made every day to avoid investment in a whole range of companies. The second would involve a decision to restrict investment in the sector taken by management. Either way, someone inside VicSuper doesn’t see a future in coal.
VicSuper is one of just six super funds that have signed the Montreal Pledge – a UN PRI initiative that mandates measurement and disclosure of carbon intensity per dollar invested on an annual basis.
VicSuper’s carbon intensity of investments has been rising over the last three years (see graph below). Hopefully this sell-off of coal assets is a step towards significantly reducing their carbon footprint.
VicSuper’s divestment of pure-play coal companies links it with peers Local Government Super and Vision Super in taking action on climate risk across its entire portfolio. Local Government Super excluded coal and tar sands in late 2014, while Vision Super switched to low carbon indices in its passive equities portfolio last year. Taking action across the entire portfolio protects all members from the risk of stranded assets; unlike several other funds that have only divested from fossil fuels in a “sustainable” option, thus obliging climate conscious members to switch.
VicSuper’s latest investment data constitutes full disclosure of their exposure to fossil fuels in their share portfolio. This has helped them rocket up the list of funds on Super Switch, where they are now seventh.
Of course, VicSuper is not alone in divesting from coal. Internationally, the fund follows Allianz, AXA, the Norwegian Sovereign Wealth Fund and the Rockefeller Brothers in divesting from coal – the single largest contributor to carbon emissions, responsible for driving dangerous climate change. The fossil fuel divestment movement now exceeds $3.4 trillion and includes over 500 organisations.
VicSuper’s apparent divestment from coal is an appropriate response to the Paris Climate Agreement reached in December last year. However, VicSuper remains invested in many other fossil fuel companies whose future will be in jeopardy if governments around the world take aggressive action on climate change. VicSuper should immediately divest from the tiny amount of residual funds remaining in coal companies, then put in place a plan to divest from all other fossil fuel companies over time. It is also important that the fund commits to not investing in coal again and informing members on their reasons for doing so.
Take Action: Tell VicSuper to never invest in coal again, and take the next divestment step