Super funds weigh climate targets amid ESG backlash
Last updated: 15:52 29 Jan 2025 AEDT, First published: 15:43 29 Jan 2025 AEDT
Australia’s largest superannuation funds appear to be reassessing their climate commitments in response to a growing backlash against environmental, social and governance (ESG) investment strategies.
Industry leaders have warned that shifting political and corporate sentiment, particularly in the United States, could hinder their ability to meet climate targets.
Association of Superannuation Funds of Australia (ASFA) CEO Mary Delahunty said funds remained interested in achieving climate goals but faced challenges due to anti-ESG movements.
“Funds will continue to have an interest in meeting climate targets and reporting on progress but movements against climate change mitigation can hamper those goals,” she told The Australian.
Delahunty pointed to changing US policy settings as a particular risk, noting that conflicting messages from investors and policymakers could make corporate engagement less effective.
AustralianSuper, the country’s largest fund with $350 billion in assets, is maintaining its focus on net zero, according to CEO Paul Schroder.
“We don’t get too caught up in fashions or politics. We just think about this: Is the world going to move to net zero? Yes, it will,” he told Bloomberg.
AustralianSuper has a 2050 net zero target for scope 1 and 2 emissions but no interim 2030 goal, and its annual report acknowledges that achieving net zero depends on policy and corporate commitments.
Australian Retirement Trust (ART) has pledged to cut emissions by 2030 and reach net zero by 2050 but signalled it could adjust its targets.
“Any adjustments will be based on updated information and in line with our members’ best financial interests duty,” ART’s head of sustainable investment Nicole Bradford said.
HESTA CEO Debby Blakey remains steadfast in her fund’s commitment, maintaining a 50% emissions reduction target by 2030 and net zero by 2050.
“Science tells us the world needs greater action,” Blakey said, emphasising the role of active ownership and capital allocation in meeting those goals.
The growing divergence in super fund approaches reflects broader uncertainty about ESG strategies amid political and economic pressures.
