Fossil fuels harming super funds
Superannuation funds have lost billions of dollars of their members' retirement savings on fossil fuel stocks in recent years, according to Market Forces.
Citing Wednesday's announcement that former coal-giant, Peabody Energy, had filed for bankruptcy, Market Forces said this was a cautionary tale to Australian investors who held fossil fuel stocks.
Market Forces executive director, Julien Vincent, said the bankruptcy was indicative of the state of the fossil fuel sector.
"Super funds have the choice to take a systemic approach to the structural decline of coal and rule it out of their portfolios altogether, or they can continue to lose members' money on the few remaining listed coal companies simply because they're in an index," Vincent said.
The firm said 15 major retail, industry, and public sector fund options had lost an estimated $5.6 billion — or up to $3024 per member — on fossil fuel company investments since the start of 2014.
According to the firm's research almost all super funds still held stocks of the last remaining pure play coal producer left in the ASX300, Whitehaven Coal, by virtue of being in the index. This is despite a 90 per cent decline in the stock since April 2011.
"After ANZ wrote down $100 million on bad loans in the mining sector last month, we expect more to come," Vincent said.
"While it's unclear whether Australian banks currently hold Peabody corporate debt, they may retain drawdown facilities and be guarantors for the financial assurance provided to state governments for mine rehabilitation."
Recommended for you
Data and technology provider Novigi has acquired Iress’ superannuation consulting and managed services business from Apex Group.
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
