In an interview with the Australian Financial Review last week, Vision Super CEO Stephen Rowe was selling the virtues of Vision Super’s plans to make its portfolio carbon neutral by 2050. This will include divestment from companies involved in the extraction, transportation and combustion of coal, oil and gas. However, with the world’s remaining carbon budget for holding global warming below 2C set to run out decades before 2050, interim targets to demonstrate a rapid phase out of fossil fuel exposure are needed.
Strangely enough, Mr Rowe claimed in the same article that divestment is not the solution: “if we divest, someone else will buy if the product is in demand… so we need to influence companies to ensure that their capital commitment policies are smart”. Yet by aiming for carbon neutrality by 2050, he clearly believes divestment from fossil fuels is inevitable. So why the delay? Well, Vision Super will argue that there is money to be made from fossil fuels in the interim. We’re reminded of the quote by Bill McKibben, founder of 350.org: “if it’s wrong to wreck the planet, then it’s wrong to profit from that wreckage”.
However, Vision Super must find a way to appease those members who have made it clear that profiting from planetary destruction simply does not reconcile with their values. Believe it or not, some members are happy to put a planet that can continue to sustain human life ahead of the returns their super manages to achieve. Just as the fund finds investment in armaments and tobacco abhorrent and therefore refuses to do it, many members feel the same way about fossil fuels. At present, Vision Super members who don’t want to profit from investment in the industries driving global warming have nowhere to go. Though the carbon footprint in Vision Super’s new Sustainable Balanced option is substantially lower than most funds in the market, it still has material exposure to the fossil fuel sector.
Vision Super could take a number of steps to persuade those members concerned about fossil fuel investment, to remain in the fund. Firstly, the fund must follow Australian Super’s lead and disclose its entire portfolio holdings – members have the right to know what they’re invested in, and with complete information can make a decision about what they do and don’t want to be invested in.
Secondly, Vision Super must provide interim goals on the road to 2050. Carbon neutrality is where the entire industry needs to be, but the fund must provide greater clarity to members on which fossil fuels will be divested and when.
Thirdly, Vision Super must be explicit about the type of change it expects from those companies in which it remains invested. Will it force companies to better manage climate risk? Will it support continued fossil fuel exploration? Will it vote against remuneration packages that offer six-figure bonuses to fossil fuel executives who explore for even more coal, oil and gas? Will it address the ongoing obstructionism from fossil fuel companies that derail public policies designed to address climate change?
Without this information, concerned members simply cannot make an informed decision. Vision Super have proven that they are taking positive action. But they must address the concerns of those members who believe those actions don’t go far enough.
If you’re a Vision Super member, please contact them via this link.