New climate plan falls short of “industry leadership” promise
16 September 2020
Following months of pressure from more than 12,000 UniSuper members, UniSuper has released details of its updated climate change policy.
Sadly, without a clear plan to reduce exposure to all fossil fuel production and infrastructure to zero, UniSuper’s new climate policy fails to live up to the fund’s own promise to prove itself an “industry leader” on climate change.
UniSuper’s climate policy produces more questions than answers. We’ve included some of our major questions below. There are a couple of ways you can challenge the fund over the lack of ambition and clarity in this policy:
2. Put your questions directly to Chief Investment Officer John Pearce at a Melbourne University-hosted panel discussion on Thursday (17 September) evening. Sign up to attend here.
What does the new policy entail?
UniSuper has committed to ensuring its investment portfolio reaches net zero carbon emissions by 2050, and will “contribute to” a 45% reduction in Australia’s emissions by 2030. The fund says it will contribute to this 2030 goal by targeting an absolute reduction in its own portfolio emissions ‘where practical’, leaving a gaping loophole in an already unclear plan.
The fund will also assess material medium and long term investments against a shadow carbon price, but has failed to provide details of the carbon price that will be used, or how and when it will be reviewed and increased over time.
UniSuper confirmed its divestment and ongoing exclusion of companies deriving more than 10% of revenue from thermal coal mining.
However, the fund has provided no commitments, strategies or targets to drop other fossil fuel investments, which include significant stakes in major Australian oil and gas producers Woodside, Santos, Oil Search and Origin. All of these companies are pursuing business strategies demonstrably consistent with the failure of the Paris Agreement.
UniSuper’s 2030 portfolio emission reduction plans will not capture the vast majority of these companies’ carbon footprints unless it encompasses the emissions caused by the end use of their products, known as scope 3 emissions. That’s not just bad for the climate, it means UniSuper would remain exposed to companies with massive climate risk liabilities on their books.
By contrast, Suncorp last month announced plans to no longer invest in new oil and gas exploration and production, and will phase out investing in these activities by 2040, with interim steps to immediately reconsider investments in the 10% most emission-intensive oil and gas producers, the top 25% by 2025, and the top 50% by 2030.
A final confusing piece of the UniSuper climate policy puzzle is its commitment that 100% of its material, active, in-house Australian investment companies will have Paris-aligned operational commitments by the end of 2021.
Given many fossil fuel producers UniSuper invests in have expansion plans that are totally inconsistent with the Paris climate goals, the fund must be anticipating these companies will announce plans to wind down production in line with the Paris goals, or else the fund is heralding significant divestments in the coming year. That’s a question we’re hoping members can help find the answer to.
However, based on the fund’s past form. it’s much more likely UniSuper will be placated by fossil fuel companies’ greenwash.
Questions that need to be answered
Portfolio emission targets
- Does the fund intend to reduce it’s portfolio emissions by 45% by 2030? Or has it been deliberately misleading in its language around this commitment?
- Do portfolio emission commitments include scope 3 emissions?
Fossil fuel exposure
- Why has the fund divested from coal miners, but not coal power generators?
- Are there any targets or strategies to ensure the fund will reduce exposure to metallurgical coal, oil or gas production in line with the Paris climate goals?
- What carbon price will the fund apply to its investment analysis?
- Will the carbon be aligned with a 1.5C warming outcome?
- How and when it will be reviewed and increased over time to ensure consistency with the Paris goals?
- When will the carbon price analysis take place, what outcomes can be expected, and how will these be communicated to members?
Paris-aligned operational commitments
- What kind of commitments will satisfy UniSuper’s objective that 100% of portfolio companies will have Paris-aligned operational commitments by the end of 2021?
- Will companies be required to set short-, medium- and long-term emission reduction targets consistent with a 1.5C warming outcome, and strategies to meet those targets?
- Will UniSuper divest from companies that fail to make these commitments?
About this campaign
UniSuper DIVEST is a project of Market Forces, supported by UniSuper members across Australia. The campaign is designed to support signatories to take ownership of the campaign and organise to share it widely among fellow UniSuper members. Together we will take this campaign into the media and right to the doors of UniSuper.
UniSuper DIVEST recognises and supports the important work of the National Tertiary Education Union (NTEU) in pushing for climate action, including motions passed in October 2019 declaring a climate emergency and calling on UniSuper to divest from fossil fuels. This campaign supports these efforts and seeks to demonstrate widespread support for fossil fuel divestment among UniSuper members.
Market Forces’ research has identified the big Australian companies that are undermining climate action by expanding the scale of the fossil fuel industry and whose future is tied to worsening the climate crisis. These are the companies the open letter calls on UniSuper to divest from.
UniSuper should not be investing any of its members’ retirement savings in these climate-wrecking companies. While the fund offers investment options that exclude some fossil fuel investments, these options represent a tiny proportion of assets under management and require members to actively seek out and switch into them. Climate action is effectively quarantined to those niche options and the members that are able to find their way into them. Meanwhile UniSuper continues to invest billions of dollars in fossil fuels through mainstream investment options. UniSuper, as a whole, is still overwhelmingly backing companies that are driving us towards runaway climate change.
This campaign provides a platform for members to demand UniSuper divests from fossil fuel companies that are undermining the Paris Agreement’s goal of limiting global warming to 1.5°C.
Market Forces is an affiliate project of Friends of the Earth Australia. Learn more at marketforces.org.au/about