Young savers force superannuation fund Hostplus to clean up portfolio

Hostplus, a $76 billion Australian superannuation fund, has pledged to make its portfolio carbon neutral by 2050, following growing pressure from its members who include young cafe and bar workers.

The net-zero target by the middle of this century recognises the financial risk climate change presents, according to chief executive David Elia, who didn’t detail any near-term targets and specific plans, including how it will reduce greenhouse gas emissions in its stock portfolio.

“We have undertaken considerable analysis to ascertain the key contributors to portfolio emissions and are developing a roadmap for how to prioritise our emission reduction activities,” Mr Elia said.

Hostplus has been pressured for more than a year by its members, some of Australia’s youngest workers, to sell its stakes in oil and gas companies and transition its portfolio to a carbon neutral one. The firm’s pledge falls short of those made by some peers, including UniSuper Management, which has vowed to sell companies that get more than 10 per cent of their revenue from thermal coal following a similar campaign.

Emissions across the firm’s equity portfolio totalled about 152 tonnes of carbon dioxide per $1 million invested in the year to June 30, according to the most recent Hostplus annual report.

Company engagement

Hostplus and many of its peers have resisted calls to exit entire swathes of the economy more quickly, instead favouring to engage with firms in a bid to pressure companies to start altering their practices. Hostplus has lifted investment in renewable energy generation and is a “significant investor in new technologies” via its venture capital program, Mr Elia said.

“We’re already contributing to the development of the technologies that will enable and empower an orderly transition and which will also deliver additional value for our members,” he said.

A survey last week from the Responsible Investment Association Australasia found four-in-five Australians want their pensions to set carbon reduction targets. Australians are also attuned to the threat of greenwashing, with three quarters considering shifting funds if their investments didn’t align with their own values, the survey found.

Bloomberg