HESTA dropped as default super provider over fossil fuel ‘inaction’

Amnesty International and the Victoria-based Centre for Non-Violence (CNV) have terminated their enterprise bargaining agreements (EBAs) with HESTA as their default super provider due to concerns over the fund’s lack of climate action.

A third community organisation, Jesuit Social Services, has also engaged directly with the $97 billion fund over its investments in oil and gas companies such as Woodside and Santos, urging HESTA to take action and improve its “climate ambition”.

According to MarketForces’ Climate Wreckers Index from 2024, HESTA’s largest investment option – its Balanced Growth product – has more than $2.5 billion invested in global companies working with fossil fuels.

“Community organisations and fund members are fed up with HESTA’s weak engagement with Woodside and Santos, which has so far failed to deliver results,” Brett Morgan, Superannuation Funds Campaign Lead at Market Forces, said.

“HESTA has disrespected its one million members by supporting Santos’ climate plan, which is consistent with catastrophic levels of global heating.

“Woodside and Santos have been on HESTA’s watchlist for nearly three years so it’s high time for the fund to stop failing its members and publish a concrete escalation plan detailing how it will hold these oil and gas companies to account.

“HESTA cannot credibly claim to support the climate goals of the Paris Agreement without also demanding an end to the oil and gas expansion plans of companies like Woodside and Santos. The fund must make its position on Santos and Woodside’s expansion plans clear or risk losing many more members.”

Also according to MarketForces, Amnesty International Australia first put HESTA “on notice” in June 2022 due to the fund’s ongoing investments in fossil fuels.

“Climate change does not just pose a threat to the natural world and our environment, it is one of the greatest human rights challenges of our time. In addition to threatening our very existence, climate change is having harmful impacts on our rights to life, health, food, water, housing and livelihoods,” Sam Klintworth, National Director at Amnesty International Australia, said.

“Continued inaction on climate change may well be the biggest intergenerational human rights violation in history and so whilst Amnesty has been loyal to HESTA for more than a decade we could no longer in good conscience continue this relationship and have HESTA as our default fund when they continue to invest in fossil fuel projects.”

The CNV said it had unsuccessfully engaged with HESTA for several years over its exposure to fossil fuels.

“Climate justice is not optional, it is an absolute ‘must have’ in an industry that works for social justice and equality,” Margaret Augerinos, Centre for Non-Violence chief executive, said.

“We expect greater integrity from HESTA. Our decision to remove HESTA as our default fund was unanimously supported by all staff, management, and our community board members.

“While we’re supporting flood victims who face homelessness, displacement and increased rates of family violence, HESTA is investing in companies like Woodside and Santos that are driving dangerous climate change and putting more women and children on the frontlines of climate impacts.”

Julie Edwards, Chief Executive Officer (CEO) at Jesuit Social Services, said while the organisation was yet to completely write off the fund, they have renewed their calls for accountability and change.

“Jesuit Social Services has a mission to build a just society and we know that climate change exacerbates existing inequality. Many of the people we work with, including people facing poverty, financial and housing stress as well as people with disabilities, are often the first and worst impacted by climate-related events,” she said.

“We recognise HESTA’s leadership in driving shareholder activism. We now call on them to take the next step to divest the more than $2.5 billion invested in companies that expand the fossil fuel industry, particularly as many of HESTA’s members work in the social services sector, supporting people who are among the hardest hit by climate change.”