Some of the nation’s largest superannuation firms are protecting their members from climate risk by dumping thermal coal from their retirement savings.
The Australian Retirement Trust (ART), which looks after more than $280 billion worth of savings, has become the nation’s largest super fund to exclude thermal coal.
As a global investor, the fund says it is committed to achieving a net-zero greenhouse gas emissions investment portfolio by 2050.
Accordingly, there will be no direct investment from July 1 in companies that generate more than 10 per cent gross revenue from the mining of thermal coal and its sale to third parties, the fund told AAP.
“Australian Retirement Trust applies exclusions in limited circumstances as part of its sustainable investment approach in accordance with members’ best financial interest,” the fund said.
Brett Morgan, super funds campaigner at shareholder activist organisation Market Forces, said the new policy cemented ART’s already nil exposure to “climate wreckers” Whitehaven Coal and New Hope.
The fund’s default investment option has had zero investment exposure to Whitehaven and New Hope since 2022.
“It’s a tribute to the thousands of members who have demanded greater climate action from the fund,” Mr Morgan said.
“ART has finally put its practice into policy and is now the largest super fund in Australia to rule out investment in thermal coal companies,” he said.
Aware Super, with over $170 billion in funds under management, HESTA with more than one million members who are mostly women working in health and community services, and UniSuper are among funds that have already made the switch.
In fact Aware Super was one of the nation’s first institutional investors to come up with a climate change adaption plan – albeit in 2015.
Speaking at a responsible investment conference in Sydney, CEO Deanne Stewart said the Aware Super team were stewards for new members who may not be retiring until the 2070’s as well as those about to leave the workforce.
“The very nature of a pension fund or wealth fund is very long term in nature, and that has a real bearing on the importance of sustainability and the importance of enduring value versus short-term profits,” she said.
Assets seen as at risk of becoming so-called stranded assets – which means having their value written off – include new thermal coal mining operations, new coal-fired power stations, and the expansion or reinvestment in older coal-fired power stations.
The short-term and longer-term outlooks are bleaker for Australia’s thermal coal prices, according to global financial information provider Fitch Solutions.
The Newcastle thermal coal price forecast for 2024 has been cut from $US150/tonne to $US135/tonne, slumping from the crisis levels of $US358/tonne in 2022 during a supply shock sparked by the war in Ukraine.
“In the longer term, we expect prices to continue easing as the global economy progresses on its shift away from energy derived from fossil fuels,” Fitch said.
“Governments, banks and mining companies continue to show a lack of appetite for coal, particularly thermal coal.”