What limits shareholder activism is the free-rider problem The more that UniSuper members sign up to it, the less room there will be for UniSuper to claim it is serving members interests. The social media campaign for UniSuper to divest from fossil fuel companies organised by the environment activist group Market Forces has amassed almost 12,000 signatures. UniSuper’s rules make this difficult, but not impossible. Research suggests consumer action works best when consumers act collectively. This is troubling because all new university staff members are defaulted into the defined benefit stream and are only able to switch to the accumulation stream during the first two years. It runs one of Australia’s last remaining defined benefit schemes, in which retirement benefits are related to years of service and salary rather than the accumulation of funds invested, and in which the investment of funds is particularly opaque with regard to climate change. UniSuper is the default fund into which new employees are automatically funnelled. Other universities effectively bar employees from choosing other super funds without formal restrictions. Enterprise bargains have made membership of UniSuper compulsory for employers of institutions such as the University of Western Australia. It would be tempting to suggest that if UniSuper members don’t like UniSuper’s investment choices they can leave.īut UniSuper is unusual among super funds. University staff have fewer choices than most However, its responsible investment reports suggest it voted in favour of few if any climate change-related shareholder resolutions at Australian company meetings. UniSuper defends these investments by saying it pushes for climate action by engaging with the companies in which it invests. The second-largest holding in that fund (after SolarEdge Technologies Inc) isĭigital Realty Trust Inc, a data centre provider that sourced 39% of its energy from renewable sources in 2016, but only There's more to super fund HESTA's divestment than ethics Global Environmental Opportunities excludes Rio but includes companies with no obvious link to environmental opportunities such as the Citrix Systems server and software corporation. Sustainable High Growth and Sustainable Balanced both include the mining company Rio Tinto in their top 12 shareholdings. They are Sustainable High Growth, Sustainable Balanced, and Global Environmental Opportunities. It points to three investment options specifically designed for “members wanting toĪvoid fossil fuels”. UniSuper has responded to criticism of these investments of almost $10 billion and $5 billion by noting that three quarters of its investment portfolio has “ set targets around emissions”. Half of that, 6%, is invested “directly related to fossil fuel exploration and production business activities.” 6% of UniSuper funds in fossil fuels It invests 12% of its funds - one in every eight dollars - in companies involved in fossil fuels.
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