Unisuper has committed to having an investment portfolio with net-zero carbon emissions by 2050 and has ruled out investing in companies that make more than 10 per cent of revenue from thermal coal under a new climate action plan released this week.
After mounting pressure from members, many of whom are part of scientific and environmental research communities, the $80 billion default fund for university workers has updated its climate policy.
UTS academic Jeremy Walker is on Unisuper's consultative committee. Credit:Wolter Peeters
The fund has committed to applying a shadow carbon price to its investments that would de-prioritise investment in industries exposed to future government regulation of the fossil fuel industry. It also pledged to ensure all active, in-house Australian companies in its portfolio have made Paris-aligned commitments by the end of next year.
Under the revised plan, Unisuper will allocate new capital to companies geared towards achieving the net-zero by 2050 target and pledged to engage with polluting businesses to reduce emissions, which could include promoting carbon offsetting.
Activist group Market Forces has led a campaign backed by 12,000 members calling for Unisuper to divest from all fossil fuel companies. Lead campaigner Will van de Pol said the new policy fell short of Unisuper's pledge to become an "industry leader" on climate change.
"The announcement is long on rhetoric and short on detail," Mr van de Pol said. "While Unisuper acknowledges that more needs to be done, this policy creates more questions than answers.
"Frankly, Unisuper’s 2030 emissions plan leaves a loophole big enough for an oil tanker to sail through."
Mr van de Pol renewed calls for the fund to divest its stakes in 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," he said.
University of Technology Sydney senior environment lecturer Jeremy Walker welcomed the fund's short and medium-term commitments but said he would press the board for more details at an upcoming meeting on Thursday. He criticised the use of carbon capture technology, which was referenced in Unisuper's previous policy.
"Carbon capture and storage is completely non-viable economically and technologically and is considered a public relations tool for the fossil fuel industry," Dr Walker said.
The sector has been under pressure from members to match talk on climate change with action as the federal government passed legislation in August designed to give Australians greater power to chose their super fund, weakening enterprise agreements that default employers into designated funds.
HESTA and First State Super launched new climate policies in July that include 2050 net-zero targets and divestment from thermal coal companies. Cbus also made a commitment in August to have a net-zero emissions investment portfolio by 2050 but stopped short phasing out existing investments in the fossil fuel industry.