HESTA has become the first major super fund to announce a Climate Change Transition Plan (CCTP) that will see it lower its emissions to zero by 2050 and divest from pure-play coal companies.
“This is an exciting piece of work that reaffirms our ongoing commitment to leadership in responsible investment and can help protect and enhance the long-term performance of our members’ investments, while driving meaningful change and contributing to a healthier planet and society,” said CEO Debby Blakey.
While HESTA’s plan still lacks clear mechanisms for engaging with the fossil fuel companies the super fund remains invested in, the news has been received with optimism by Healthy Futures, an organisation of health professionals who are taking action to address “environmental determinants of health”.
“We think it’s an excellent step by HESTA, and we applaud them and their leadership,” Healthy Futures co-ordinator Kate Lardner told Investor Daily. “They’re really the first major fund to take a step like this and this is a win for the Healthy Futures divestment team. They’ve done an extraordinary job of pressuring HESTA to take this step.”
But Ms Lardner says there’s still a lot of work to be done.
“Our main concern as health professionals is that our money is still supporting this by being members of HESTA,” Ms Lardner said. “We would still like them to divest from the remaining companies that have been listed on Market Forces as being incompatible with a [climate-safe] world.”
HESTA’s plan – which is still relatively limited – also serves as indictment of the wider superannuation industry, which has spent the last several years paying lip-service to the idea of fighting climate change while continuing to invest in fossil fuels. Research from JANA shows that a majority of super funds are still failing to take action on climate change despite the harrowing crisis of the Black Summer bushfires, and have more or less indicated that they would not be changing their ways unless the government enacted sweeping policy changes first. In that environment, it’s hard not to applaud HESTA – and for HESTA’s part, they know it’s only the beginning.
“We’re at the start of this journey, and we acknowledge that there is still a lot of work to be done,” Ms Blakey said. “We know our members in health and community services care deeply about climate change and that’s why we’re committed to sustained, long-term action to transition our investment portfolio for a low-carbon future.”
Brynn O’Brien, executive director of the Australasian Centre for Corporate Responsibility (ACCR) says it’s an important step to take.
“It’s another nail in the coffin for coal,” Ms O’Brien told Investor Daily, while noting that HESTA continues to hold long-term stakes in emissions-intensive companies whose business models are not compatible with the Paris Climate Agreement.
“Engagement is a key part of why they’re continuing to hold them,” Ms O’Brien said. “And they should be very clear, detailed and transparent with their members about what their expectations are of those engagements and over what timelines they expect to achieve success.”
HESTA has taken the first step, but the winder superannuation industry still needs to get with the program. As the impacts of climate change become more visible – and devastating – super funds will have important decisions to make about protecting member returns.
“If efforts to improve the current trajectory of global warming are not successful, then we can expect an increase in the severity and frequency of damage from the physical impacts of climate change,” Ms Blakely said. “There is no doubt that the social, environmental and economic cost of inaction is going to be far greater than the cost of responding to climate change.”
