Members of $68bn industry super fund Hesta have put their names to a full-page newspaper ad calling on people to join them in leaving the fund over its continued investment in fossil fuel companies.
In addition to 130 individuals who have pledged to leave Hesta, the Australian arm of Amnesty International says it is considering ditching the fund as its default option for its 75 employees unless the fund divests from fossil fuel.
However, Hesta defended its approach, saying engaging with companies changed their behaviour and if it dumped its shares there was no guarantee the next owner would care about global heating.
Hesta has about 930,000 members, mostly from the health and community services sectors.
The campaign against Hesta is spearheaded by Market Forces, an activist investor group affiliated with environmental organisation Friends of the Earth.
As part of the campaign, groups of Hesta members also rallied outside offices of the fund across Australia on Friday.
In the ad, taken out in the Australian Financial Review by Market Forces, angry Hesta members call on the fund to “stop investing in climate catastrophe” and say they are “leaving or planning to leave the fund if it keeps investing in companies expanding fossil fuels, driving catastrophic climate change”.
The superannuation fund campaigner at Market Forces, Rachel Deans, said the fund was targeted “because Hesta members are really disappointed in their fund for having $2bn in companies expanding fossil fuels”.
“They don’t want to see their fund investing in companies like Woodside or Santos,” she said.
Deans said the campaign had been started by Hesta members – about 30 previously left the fund over its fossil fuel investments prior to Friday’s action.
“The impetus started with Hesta members, there was a group of members who divested last year and then they reached out to us,” she said.
She said members would stay in the fund if it had a policy to exclude investment in Woodside, Santos and other fossil fuel companies.
“Hesta needs to show leadership otherwise it risks losing thousands of members and hundreds of millions of dollars to funds investing in a way that’s safer and healthier for the planet’s climate,” she said.
The Amnesty International Australia campaigner Rose Kulak said the organisation was considering ditching Hesta because the climate emergency was also a human rights crisis that “is already wreaking havoc on the lives of millions of people, exacerbating inequality and discrimination as well as threatening the enjoyment of our rights and indeed the future of humanity”.
“Amnesty International Australia has been loyal to Hesta for more than a decade, but Amnesty can no longer in good conscience have Hesta as our default fund when money is being invested in fossil fuel projects,” she said.
Asked if Hesta was concerned about members leaving, its chief investment officer, Sonya Sawtell-Rickson, said the fund valued “every single one of our members and the opportunity to improve their financial futures”.
“But we understand that there are a broad range of views across our 930,000 members, including on issues like climate change,” she said.
She said members could choose a sustainable investment option “to minimise their exposure to fossil fuels”.
Hesta was “strongly committed to climate action” and was the first major fund to commit to 2050 emission targets, Sawtell-Rickson said.
“However, we believe active ownership of companies is more effective than divestment alone at driving change.
“Hesta as a shareholder can directly engage with companies exposed to transition risk to push for greater climate action.”
She said that selling out of companies without first pushing them to change their behaviour “just shifts the problem to the next buyer of the shares, who may not be interested in supporting greater action on climate change”.
Hesta’s approach, which included lobbying companies and voting against the re-election of directors, had delivered “significant outcomes over the past few years including uptake of net zero targets, disclosure of climate-related risks and initial investment in breakthrough technologies,” she said.
“The effectiveness of this approach was most recently demonstrated when Hesta stepped up to make our views known about the planned demerger of AGL – one of Australia’s biggest emitters.”
The demerger, which would have seen AGL’s coal-burning power plants spun off into a separate company, was defeated last month after opposition from the tech billionaire Mike Cannon-Brookes.
Hesta, which supported Cannon-Brookes, owns about 0.36% of AGL.
