Top super funds lacking investment in renewable energy

A study has revealed Australia’s top 30 superannuation funds have invested in just a fraction (4%) of the renewable energy capacity needed to meet the country’s mandated 2030 climate goals.

The Australian Government has set a target to achieve 82% renewable electricity by 2030. Achieving this target would require more than 97 GW of renewable energy capacity, excluding rooftop solar, according to the Australian Energy Market Operator.

The analysis has uncovered that Canadian pension funds have invested $408 million more in Australian renewable energy projects since 2020 than Australia’s top 30 funds.

“Super funds are missing out on a critical opportunity to own the clean energy infrastructure that will power Australia’s economy for generations,” said Brett Morgan, report author and Head of Australian Campaigns, Market Forces.

“Millions of working Australians could benefit from their retirement savings supercharging Australia’s clean energy revolution and delivering reliable, affordable renewable energy.”

The research found that since 2020, the top 30 super funds directly contributed $771 million to the $99 billion invested in Australian clean energy projects. This investment is 0.03% of the $2.5 trillion in members’ retirement savings managed by these 30 funds.

Only six of Australia’s top 30 funds have direct investments in Australian renewable energy or battery storage projects:

• Aware Super
• Cbus
• HESTA
• NGS Super
• Prime Super
• Rest
   

The analysis stated that 23 of the remaining 24 funds may have ‘indirect’ exposure to these projects through holdings with external asset managers and in infrastructure funds. Quantifying the extent of this investment is impossible without further disclosure.

The research showed that most (57%) of the ‘primary finance’ flowing to renewable energy projects in Australia comes from Australian and overseas commercial banks, overshadowing the contribution from Australia’s super funds.

“Australian super funds need to set ambitious targets for increasing investments in Australian renewable energy projects, and report to members on progress,” Morgan said.

“Any super fund which supports the Paris Agreement’s climate goals must significantly ramp up its policy advocacy efforts to remove barriers to scaling investments in clean energy.”

Image credit: iStock.com/avgust01