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Pressure on funds to come clean and repent
The Australian Youth Climate Coalition (AYCC) and the Asset Owners Disclosure Project (AODP) have teamed up to lobby super funds to come clean on fossil fuel-based investments and rebalance portfolios with greener investments.
Over 50 per cent of the $60 trillion in superannuation assets globally was invested in climate-exposed assets such as fossil fuels, with less than 2 per cent invested in "cleaner investments", the groups said.
"If funds' clean energy investments were increased to just 5 per cent, $3 trillion could be leveraged globally — that's almost one-third of what's needed to solve climate change," said AODP director Julian Poulter.
Although its research showed that super funds understood the climate change risks, 94 per cent did not calculate portfolio-wide climate risks while 67 per cent were unaware of how much they had invested in clean energy, according to AODP.
More worryingly, none were aware of their fossil fuel exposure, it said.
AYCC national director Lucy Manne said the brunt of inaction would fall on younger generations.
"Superannuation is heavily loaded against young people whose investments will have to bear the costs of climate change," she said.
"We can no longer allow short-termist funds to use our weekly wages to build a completely unsustainable economy."
In January, a report from the Global Sustainability Institute at Anglia Ruskin University said global pension pots could be wiped out and pension funds become insolvent within the next few decades if more was not done to address climate change risks.
"If future economic growth is limited by resource constraints, or realistically by other factors such as debt overhang or reduced productivity, this puts into question the viability of current savings vehicles' structure, regulation and even purpose," it said.
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