Industry funds lower Woodside and Santos exposure

Industry superannuation funds have been identified as having actively reduced their investment exposures to Australia’s oil and gas majors, Woodside and Santos over the past two years but an activist group has named those with the highest exposures.

New analysis from climate activist group, Market Forces has found that Australia’s top 30 superannuation funds, most of which are industry funds, have on average reduced their holdings in Woodside by 0.30% points against the company’s weight in the ASX300 which is equivalent to 10% of the company’s market share.

The analysis said that while Woodside and Santos had increased their share of the Australian stock market over the past two years, the big superannuation had gone cold on them in terms of investment exposure.

However, at the same time, the activist group named big industry funds AustralianSuper and HostPlus as failing to adequately exercise their voting power on climate risk.

Market Forces Superannuation Funds Campaigner, Brett Morgan claimed the analysis showed Australia’s largest superannuation funds are turning their backs on Woodside and Santos as their members demanded greater climate action.

The Market Forces analysis said the top three funds with the highest investment exposure to Woodside, compared with the ASX300 benchmark as of 30 June 2023, are:

• AustralianSuper’s Balanced option: 1.69% above the benchmark weight
• ESSSuper’s Growth option: 1.47% above the benchmark weight
• AMP’s MySuper 1970s option: 0.65% above the benchmark weight

The top three funds with the highest investment exposure to Santos, compared with the ASX300 benchmark, as of 30 June 2023 are:

• ESSSuper’s Growth option: 3.05% above the benchmark weight
• Hostplus’ Balanced option: 1.64% above the benchmark weight
• Equipsuper’s MySuper option: 1.41% above the benchmark weight

Market Forces said that it could reveal that Australia’s top 30 superannuation funds were all committed to active ownership as a strategy for addressing environmental, social and governance issues, including climate risk.

“Yet while some funds have increased pressure on Woodside and Santos through their share voting behaviour, others are failing to do so, including AustralianSuper, Brighter Super, Hostplus, IOOF and Qantas Super,” Market Forces said..

“Australian super funds have a crucial opportunity in April to vote against the re-election of directors at Santos and Woodsides and their remuneration arrangements, and must take this opportunity or face scrutiny for greenwashing.

“Super funds must stop the greenwash and ramp up pressure on Santos and Woodside, which are steaming ahead with new oil and gas projects out of step with a safe climate.

“A groundswell of members want to see their super fund sparing no effort to end Santos and Woodside’s oil and gas expansion plans, and divesting if these companies fail to step into line.”