Australian Fund: Coal Exclusions Won’t Make a Difference to Net Zero Efforts

Pension and investment funds dropping coal companies from their portfolios will not make a difference for the world's efforts to get to net zero, the chief investment officer of a large Australian pension fund told Bloomberg on Tuesday.  

"We don't think exclusions make any difference in practice to getting to net zero," Michael Wyrsch, Chief Investment Officer at Australia's Vision Super Pty, told Bloomberg in an interview.

"We don't see it as a victory, us holding a net zero portfolio while the world goes to hell in the hand basket, which is its current trajectory."

Vision Super has reviewed previous restrictions on coal and other fossil fuel investments as a growing number of funds globally have started to reassess their exclusion policies.

The fund scrapped last year its exclusion of thermal coal investments, for which it was criticized by campaigners this week.

Vision Super now has new emissions targets for its portfolio of equities, which should have a 30% lower carbon intensity compared to a benchmark of Australia's top 100 companies, Wyrsch told Bloomberg.

A new analysis from Market Forces showed on Tuesday that Vision Super has changed its ESG policy, removing its revenue-based coal, oil, and gas investment restrictions and replacing them with a 'carbon budget framework.'

Vision Super has since re-invested in coal miner Whitehaven, the research found.

"Vision Super must explain to its members why their retirement savings are once again invested in Whitehaven Coal, one of Australia's worst climate wreckers," said Brett Morgan, Superannuation Funds Campaigner at Market Forces.

"By scrapping its coal exclusion policy, Vision Super is out of step with member expectations as many super funds are dumping all investments in thermal coal."

Vision Super has been using its shareholding in Whitehaven to press for better climate and emissions reporting, Wyrsch told Bloomberg.

Other funds in Australia and Europe continue to restrict investments in coal.

For example, Australian Retirement Trust, which manages $183 billion (AUS$280 billion) of retirement savings and is the second-largest Australian pension fund, is placing thermal coal on its exclusion list as of July 1, as it looks to have a net-zero emissions portfolio by 2050.   

By Tsvetana Paraskova for Oilprice.com