Australia's second-largest superannuation fund is preparing to dump its shares in companies that derive more than 10 per cent of their revenue from thermal coal mining as it embarks on the most aggressive immediate climate push of any large local investor.
First State Super, which holds $130 billion in retirement savings, is distributing a new climate plan among its members detailing initiatives to shield their money from the threats of global warming, including setting a 30 per cent emissions-reduction target across its investment portfolio by 2023 and a 45 per cent cut by 2030.
First State chief executive Deanne Stewart told The Age and The Sydney Morning Herald climate change posed the single biggest risk to Australians' retirement savings, and superannuation investors must "take bold and decisive action now" to safeguard members' long-term interests.
"Climate change clearly poses the most significant risk to investment portfolios over the long term," she said. "Why we are stepping it up to a much greater degree now is we see that risk front and centre in terms of the impact it is likely to have on investment returns for our members."
The most immediate direct action is to divest all its shareholdings of companies that mine thermal coal – the type of coal used in power generation – by October 2020.
Although the plan does not specify which thermal coal miners will be divested, corporate records indicate First State held shares in ASX-listed Whitehaven Coal, Stanmore Coal, New Hope and Washington H. Soul Pattinson in 2019.
The next phases of the fund's strategy – a 30 per cent emissions cut across its entire listed equities portfolio by 2023 and 45 per cent by 2030 – are more immediate goals than those set by many other investors, whose targets stretch out to 2050.