As clean energy investment faces headwinds, superannuation could help fill

When Winnie Fu looks at her young son, she regularly thinks about his future.

“I look at how the world is destabilising around us, I think we need to do everything we can to try and make the world a better place for the next generation,” she said.

So it came as a shock when she recently found out her super fund, AustralianSuper, was now the biggest shareholder in Whitehaven Coal. Ms Fu is now considering switching super funds, even if it means receiving less money in the long run.

“If we do not have a stable society, if we do not have a livable climate, if we have social unrest because there is mass immigration from climate change … we cannot have a good life just because we have more money,” she said.

Ms Fu is among many Australians who want to see a greater share of the country’s $4.5 trillion in retirement savings invested in renewable energy — but turning that ambition into reality could be more difficult than it seems.

Super fund investment in clean energy

Environmental advocacy group Market Forces analysed the direct investments made by Australia’s 30 largest superannuation funds since January 2020. It found $99 billion had been invested in 514 renewable energy projects, with the country’s top 30 funds contributing $771 million, or 0.8 per cent.

The analysis found that Canadian pension funds have contributed more to Australian renewable energy projects, at $1.2 billion.

Last year, the group also revealed that Australia’s top super funds invested more than three times as much in companies with global fossil fuel expansion plans than backing clean energy companies.

Association of Superannuation Funds of Australia chief executive Mary Delahunty said 29 out of the 30 major super funds had “exposure” to renewable energy assets.

“Super funds will invest either directly or indirectly and the majority is held indirectly,” she said.

“Funds are always looking for good opportunities to produce appropriate risk-adjusted returns for members and renewable assets have proven to be some of the really good performing assets in the portfolio so far.”

AustralianSuper said it remains committed to reaching net zero emissions by 2050 within its investment portfolio and one of the reasons it invested in Whitehaven is due to the company’s metallurgical coal production, which is a key component of steel production.

There are examples of super funds investing in renewable energy, such as Rest Super, which owns the largest wind farm in Western Australia, the Collgar Wind Farm.

But in recent years, funds have flagged a desire to invest more in clean energy, while emphasising that investments must be made in the best financial interests of members.

“When we ask Australians what they want from their super funds, they’re very…