Pretty much same info as previous post.

Vision Super weakens ESG policy, buys up Whitehaven shares

A leading industry superannuation fund that sells itself as an ethical and “green” brand watered down its environmental investment commitments last year before buying up more than $2.2 million worth of stocks in coal mining giant Whitehaven.The about-face comes as companies wind back or even delete their environmental commitments in a practice known as “green hushing”, amid a regulatory crackdown on firms failing to keep their climate action promises.

Vision Super’s investment update removed a ban on companies deriving more than 25 per cent of their revenue from thermal coal – which prompted its original divestment from Whitehaven in 2021 – and instead only promised it “may” exclude such holdings.

Vision Super has invested in Whitehaven since weakening its ESG investment policy. Robert Rough

The about-face comes as companies wind back or even delete their environmental commitments in a practice known as “green hushing”, amid a regulatory crackdown on firms failing to keep their climate action promises.

Market Forces superannuation researcher Brett Morgan said Vision Super’s stance was “very concerning” for its customers who did not want to invest their savings in fossil fuels, and for the broader industry given its earlier leadership on climate change.

Vision Super was among the first funds to introduce restrictions on oil, gas and coal companies last decade and leans heavily on its green credentials in its marketing.

Its website promises customers their retirement savings will “build a better future” and “tilt away from carbon”, while its ESG policy labels climate change as “one of the greatest environmental and financial risks our investment portfolio faces”.

But as well as its multimillion-dollar exposure to Whitehaven, analysis by The Australian Financial Review of its product disclosures showed that, at the end of 2023, it was also invested in fossil fuel behemoths Santos and Woodside across all of its options with exposure to Australian stocks.

There was no explanation given to customers for weakening its environmental commitments last November, despite the fund pledging that “high standards of openness and transparency” was one of its core company values.

“It’s a pretty big concern for members of Vision Super, who now can’t be sure that the fund is investing their retirement savings in a way that doesn’t worsen climate change,” Mr Morgan said.

“It also demonstrates that the super industry still has a fair way to go in terms of living up to its climate commitments … ultimately, any fund that acknowledges climate risk must be implementing strict policies to rule out investments in companies that are expanding in the fossil fuel sector.

“Any investment in those companies is a vote of support in those expansion plans.”

Whitehaven has six coal mine expansion plans afoot.

When Vision Super started its divestment from thermal coal companies in 2018, chief executive Stephen Rowe said fossil fuel was one of “the biggest contributors to climate change, and we don’t believe the risk of continuing to use them can be mitigated”.

Vision Super did not respond to a request for comment.

‘Cover all coal, not just thermal’

Mr Morgan also warned most super funds only focused on thermal coal in their green investment pledges, despite many companies owning metallurgical coal mines too.

New Market Forces research found this differentiation meant five of Australia’s top 30 super funds (Commonwealth Super Corp, NGS Super, TelstraSuper, Spirit Super and Super SA) could reinvest in Whitehaven if the two metallurgical coal mines it recently bought from BHP are successful.

These funds’ green promises only exclude companies that derive a certain portion of revenue from thermal coal, which Whitehaven is hoping will fall relative to metallurgical coal.

“But coal is coal,” Mr Morgan said. “These funds need to strengthen their investment policies to cover all coal, not just thermal, now if they care about climate risk.”

Vision Super’s buy-up of Whitehaven shares comes ahead of its planned merger with Active Super next March. Vision’s changed ESG mandate could conflict with Active Super’s, as the Market Forces analysis found the latter was the only major super fund to include all coal in its green investment exclusion policies.

But Active Super’s ESG commitments are also under a cloud after the Federal Court ruled this month it had misled and deceived customers about its investments in companies such as Whitehaven Coal and SkyCity Entertainment.