Overnight at the UN Climate Summit, German environmental NGO Urgewald published the “Global Coal Exit List” (GCEL) – a comprehensive list of over 770 companies involved in the thermal coal value chain.

Unsurprisingly, Australia has a sizable representation, with more than 70 companies including the usual suspects BHP Billiton, Rio Tinto, South32, AGL Energy, Origin Energy and Whitehaven Coal.

The list also profiles those companies seeking to expand the thermal coal industry:

  • Coal miners looking to expand their Australian operations including New Hope Group, White Energy and Whitehaven;
  • Australian companies looking to build new coal-fired power stations in Africa including Intra Energy Corp and Resgen;
  • International companies looking to build new coal-fired power stations in Asia including KEPCO (Korea), Marubeni Corp (Japan) and NTPC Ltd (India).  

TAKE ACTION – Use the form to tell your fund to step up its engagement to bring coal companies into line with a less-than-2°C future.

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Tell your fund to bring coal companies into line today!

The United Nations Environment Programme’s latest Emissions Gap Report tells us that no more new coal infrastructure should be built if we are to meet the aims of the Paris Agreement, yet the GCEL identifies 225 companies planning to expand coal mining, and 282 companies planning new coal-fired power stations. GCEL companies plan to expand coal fired energy capacity by a whopping 840,000MW (over 18 times Australia’s capacity!).

Our research has revealed a significant build-out of coal-fired power in Indonesia since 2010. Both Indonesia and Vietnam have plans for major expansions of coal-fired power that Market Forces is tracking closely. These power stations might be thousands of kilometres away, but are built by companies that have your super invested in them.

This raises a number of questions: how can super funds justify remaining invested in companies so intent on wrecking the climate? How can our super funds claim these investments are in members’ best interests? How can super funds claim their process of engagement is working?

Current engagement techniques failing

Many funds say they prefer to engage with fossil fuel companies to encourage better management of climate risk. But the fact that coal companies are continuing to undermine the Paris climate goals shows that engagement has failed to bring about meaningful change.

Take for example Whitehaven Coal, a pure-play coal company listed in the ASX100. In talking up its expansion plans, Whitehaven has referenced coal demand projections that assume major countries’ current policies will remain the same out to 2040. This is a ridiculous and cynical scenario, given the Paris Agreement requires countries to regularly review and update their emissions reduction policies in order to meet the overall aim of keeping global warming well below 2°C.

Whitehaven’s business plans are predicated on the world failing to meet its commitments under the Paris Agreement. In fact, those plans assume countries will stop improving emissions reduction policies today. Having had two years to encourage Whitehaven to bring its business plans into line with the Paris Agreement, investors have failed to make any progress.

Clearly, engagement with coal companies has failed. Super funds must now demand fossil fuel companies produce a viable business plan showing how they will reduce emissions in line with the requirements of the Paris Agreement. If companies fail to produce and implement these plans, funds must divest.

TAKE ACTION – Use the form above to tell your fund to step up its engagement to bring coal companies into line with a less-than-2°C future.

Risk mis-management?

The Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) identified potential reduction in fossil fuel demand as a financial risk posed by climate change.

“The reduction in greenhouse gas emissions implies movement away from fossil fuel energy and related physical assets. This coupled with rapidly declining costs and increased deployment of clean and energy-efficient technologies could have significant, near-term financial implications for organizations dependent on extracting, producing, and using coal, oil, and natural gas.” TCFD Final Recommendations Report, June 2017

A recent legal opinion commissioned by Market Forces stated that such financial risks should be considered by super fund trustees. But our Risky Business report found that 82 of Australia’s 100 largest superannuation funds disclose inadequate or no tangible evidence that they have considered the impact of climate risk on their investment portfolios.

The Australian superannuation industry must protect members by acknowledging and effectively managing the financial risks posed by climate change. This process should be documented and communicated to members, who have a right to know how their retirement savings are being adequately protected from climate risk.

TAKE ACTION – Use the form above to tell your fund to step up its engagement to bring coal companies into line with a less-than-2°C future.

The Global Coal Exit List can be accessed here.