The chief executive of the Minerals Council of Australia (MCA), Brendan Pearson, has accused superannuation funds that limit fossil fuel investments of being distracted from the job of maximising financial returns for members.
Mr Pearson was responding to the news that AMP Capital will not invest in fossil fuel related businesses with its responsible lending fund, which manages about $3 billion worth of investments.
Mr Pearson criticised the performance of funds that were tailored to suit ‘‘responsible’’ investors.
His comments came as another investment fund Hunter Hall, with $1 billion under management, announced it would no longer invest in fossil fuel producers in any of its funds.
‘‘We are not creating our own definition of what a fossil fuel investment is, we are actually saying anything that falls into that classification of oil, gas and consumable fuels, we won’t invest into that,’’ said Hunter Hall chief executive David Deverall.
Speaking to the Australian Financial Review newspaper Mr Pearson said; ‘‘Clearly, the maximisation of returns is not a key objective of these investors, if AMP’s existing responsible-super-fund products are any indication.”
‘‘Looking at seven-year net returns to 31 December 2013, fund rating agency Chant West ranks AMP’s Responsible Investment Leaders Conservative super fund at 30 out of 49, and AMP’s RIL Balanced super fund at 27 out of 55.
The vast majority of AMP’s $128 billion of funds under management can still be invested in fossil fuels, but the two per cent held in the ‘Responsible Investment Leaders category will no longer be invested in companies with more than 20 per cent of earnings in thermal coal, oil from tar sands and several other types of fossil fuel.
AMP and Hunter Hall are not alone in the move, with one other fund managers confirming that it too would reduce exposure to fossil fuels.
The super fund for education professionals, Unisuper, will remove fossil fuel producers from its ‘‘socially responsible’’ funds in September.
Unisuper will go further than AMP, and companies with any earnings exposure to fossil fuels will be excluded, not just those with more than 20 per cent earnings exposure.
Unisuper has $41 billion under management, and the ‘‘socially responsible’’ funds hold about $1.4 billion of that.
