(Bloomberg) -- Australian pensions giant UniSuper Management Pty’s fossil fuel investments have edged higher even as the fund faces heightened pressure to divest from the industry.
The A$108 billion ($73 billion) fund’s latest climate risk report showed that 2.8% of its investments were in polluting industries as at June 30, from 2.55% a year earlier, largely thanks to beneficial rallies in energy-related companies. Its holdings include local oil and gas firms Woodside Energy Group Ltd. and Santos Ltd.
“The greatest impact we have is by owning shares in companies -- this gives us the opportunity to directly influence change by engaging with boards and management and by exercising our voting rights,” Chief Investment Officer John Pearce said in a statement. “Divestment, while always an option, eliminates the influence we have.”
The uplift shows the challenge facing Australia’s largest pension funds as they balance efforts to work toward net zero targets while holding profitable investments in polluting industries. UniSuper was last month served with a legal notice from the Environmental Defenders Office alleging that the fund’s holdings in Santos meant its investment strategy was in breach of its climate goals.
“UniSuper must publicly commit to divesting from all companies that are undermining global climate goals by expanding the fossil fuel industry,” environmental group Market Forces said in a statement following the report.
UniSuper, which manages the retirement savings of university workers, has been the target of an online campaign organized by Market Forces calling for divestment of fossil fuels. More than 15,000 of the fund’s 500,000-plus members have signed up.
Pearce said decarbonization of the economy would be one of the most significant investment themes for at least the next decade, and that UniSuper was investing in companies that are transitioning their businesses “to survive and thrive in a low carbon world.”
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