Pressure mounts on Australia pensions to drop fossil fuels

Melbourne

THE world's fourth-largest pension pot - with about US$1.9 trillion - is facing mounting calls to ditch fossil fuels.

UniSuper, which manages A$85 billion (S$78 billion) in retirement savings for university researchers and academics in Australia, on Wednesday faced protests demanding the fund scrap investments in companies that are undermining the goals of the Paris climate agreement. The protests took place at a UniSuper-sponsored Universities Australia event in Canberra and coincided with a full-page advertisement from campaigners in the Australian Financial Review.

UniSuper "is directly undermining our work and our future by driving climate change through its continued funding of fossil fuels," Florian Busch, who researches carbon dioxide absorption in plants at the Australian National University, said in a statement.

Offices of Health Employees Superannuation Trust Australia, known as HESTA, a fund managing A$55 billion in retirement savings for health and community services workers, also faced demands to take more action on climate change. Protesters occupied the building's entrance in Melbourne on Wednesday to pressure it to divest fossil fuels.

UniSuper declined to comment. HESTA met the protest organisers to discuss their concerns, a spokesman said.

The demonstrations are adding to pressure on custodians of Australia's A$2.95 trillion retirement savings to catch up with peers like Europe's Stichting Pensioenfonds ABP in cutting exposure to high-emitting companies. Those calls have gained traction after the nation's deadly wildfires heightened concerns about the impact of climate change.

Australia's pensions industry has largely resisted exiting a whole segment of the economy amid pressure to meet minimum return targets. While funds have lifted investment in renewable energy projects, they also believe that by maintaining positions in climate-change offenders they can pressure companies to start altering their practices.

Environmental activists and the funds' own members say exerting influence isn't sufficient. More than 10,000 people have signed an open letter demanding UniSuper scrap investments in firms that are expanding their fossil-fuel output. BLOOMBERG