A major Australian superannuation fund is under fire for substantially increasing its investment in the coal company Whitehaven, and being on the brink of becoming its biggest backer, while still claiming to be committed to reaching net zero emissions.
Shareholder advocacy groups said AustralianSuper was moving against the trend of its peers with recent share purchases in the company, which they said were “flying in the face of environmental, social and governance (ESG) commitments”.
Clean energy finance organisation Market Forces said the super fund was “on the precipice” of becoming Whitehaven Coal’s largest investor, with shares worth about $395m.
Recent disclosures by Whitehaven, first reported by the Australian Financial Review, reveal AustralianSuper now owns 70.9m shares in the company, or 8.47% of shares on issue, after the recent purchases.
AustralianSuper is the second-largest shareholder in the coal company and, according to Market Forces, holds nearly triple the combined shares of all of the other top 30 super funds in their default investment options, based on the latest disclosures effective as at December 2024.
Market Forces said “after fully and publicly divesting from the company in 2020”, AustralianSuper now held its biggest interest in Whitehaven in 10 years.
“How on earth can AustralianSuper call itself a responsible investor after buying millions of shares in Whitehaven Coal?” Market Forces’ senior analyst, Brett Morgan, said.
“AustralianSuper is backing Whitehaven’s expansion plans, which would result in nearly 5bn tonnes of carbon pollution from burning coal, equivalent to running all of Australia’s coal-fired power stations until 2062.”
Morgan said the organisation had been contacted by dozens of AustralianSuper members concerned “that their fund is greenwashing and endangering a safe future for their retirement”.
An AustralianSuper spokesperson said the fund remained committed to its long-term goal of net zero by 2050.
“Whitehaven’s acquisition of BHP’s metallurgical coal assets changed the company’s revenue profile and made it a more attractive investment given their importance in steel making,” the spokesperson said. Metallurgical coal is used primarily to make steel while thermal coal is primarily used for electricity generation.
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“The energy transition is not linear, which means thermal coal will be an important stabilising source of electricity for the grid for some time to come, both domestically and overseas.”
But Naomi Hogan, from the Australasian Centre for Corporate Responsibility, said climate-aware investors across the superannuation sector had been making an effort on ESG and emissions reductions and “this AustralianSuper move is going against the trend of its peers”.
“Metallurgical coal investing cannot be used to shield against scrutiny of coal,” Hogan said.
“Last year ACCR published research based on a global survey of 500 investors in the steel value chain, which found that 80% of investor respondents believe metallurgical coal’s risk profile will increase in the next decade.”
Hogan said AustralianSuper, having previously “talked up” the importance of its companies aligning with the objectives of the Paris Agreement, now has a “huge amount of work ahead to bring [Whitehaven’s] emissions into line”.
“ACCR will be looking closely at AustralianSuper’s disclosures outlining its ESG risk assessment of this investment,” she said.
