Reason health workers are ditching a major Aussie super fund

Health workers have withdrawn their savings en masse from a major Aussie super fund to send a powerful message.

On Friday, a group of over 130 doctors and nurses divested their money from industry fund HESTA in direct response to the company’s investment in fossil fuels.

According to the climate advocacy group behind the move, Market Forces, HESTA has around $2 billion invested in fossil fuel companies, including oil and gas giants Woodside and Santos.

Pediatric anesthetist Dr. Richard Barnes said he was particularly concerned about the health impacts of the climate crisis.

“I’ve been a member of HESTA for a long time, and I’m very conscious now they continue to have significant holdings of several companies primarily involved in fossil fuels,” he said.

“I’ve decided to move my retirement money elsewhere. I can be sure it won’t be supporting fossil fuel companies.”

Camera IconOver 130 health workers are moving their savings to super funds, which don’t invest in fossil fuels in a deliberate action. iStock Credit: Supplied

All up, the savings of those involved in the action is estimated to see $11.7 million drained from HESTA.

Across its more than 930,000 members, HESTA has roughly $68 billion in managed funds.

It is believed to be the single biggest, single-climate divestment day targeting a superannuation fund in Australia’s history.

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“The amount of money we’re going to move out of HESTA is a tiny fraction of their total super pool, but I hope our action will send a message,” Dr. Barnes said.

Former nurse and chief executive at the Mental Health co-ordinating Council, Jenna Bateman, said with many members in the health and welfare sector, HESTA should be a leader in tackling climate change, which will disproportionately affect the most vulnerable.

“It’s past planning time; it’s time to do it now. They have to divest from fossil fuels, and I think taking your money out or raising the issue is just putting that pressure on them,” she said.

HESTA chief investment officer Sonya Sawtell-Rickson said immediate divestment from fossil fuels was not necessarily the best way to affect positive change in companies.

Camera IconAccording to HESTA, its focus was on improving the long-term financial outcomes for its members when navigating the energy transition. Supplied, Sept 2015 Credit: Supplied

“Simply selling shares in these companies, without first attempting to change their behavior, does not contribute to reducing emissions or systemic risk,” she said.

“As a shareholder, HESTA can directly engage with companies exposed to transition risk to push for greater climate action.”

According to Ms. Sawtell-Rickson, HESTA has used shareholder meetings to vote against plans by Woodside and Santos which did not align with the Paris agreement.

She added where companies were not responsive or failed to improve their practices; divestment was one option it could take “where it’s in the best financial interest of members”.

HESTA is not alone in struggling to balance divesting from fossil fuels with broader economic concerns and impact on its investment portfolios.

A smaller fund, NGS Super, has a more ambitious target of making its $12 billion worth of holdings carbon neutral by 2030, with an interim target of a 35 percent reduction in carbon by 2025.

“If we wanted to decarbonize the portfolio tomorrow, we could, but it would come at a high cost to our members’ investment performance and the retirement savings of our members,” NGS chief investment officer Ben Squires said.

“We have committed to making no new investments in assets that, in our view, cannot transition to the low-carbon economy.”

Camera IconSome healthcare workers say particularly a super fund that represents them should be taking more of a lead on an issue like climate change. NCA NewsWire / Dylan Coker Credit: News Corp Australia

Ms. Bateman said she has yet to choose a better alternative super fund as she struggles to discern genuine sustainability claims from “greenwashing”.

“It should be transparent; as a punter, I shouldn’t have to wade through a lot of information and words that aren’t telling me what I need to know. They’re hiding the truth from me,” she said.

Ms. Bateman added that immediate divestment from all fossil fuels was not a deal-breaker. Still, institutions must demonstrate clear and concrete timeframes to extend the process over several years.

“If I can see a clear exit plan, then I am more likely to stay with an institution – but it needs to be very clear and very real,” she said.

“I don’t want ‘we will consider in five years that we may divest’. I want to know that in five years, they will.”

Dr. Bateman said he had selected two funds as alternatives with no holdings in fossil fuel funds whatsoever.

He explained that changing funds was surprisingly easy and could be done by approaching the new fund with the details of your current super fund, and “basically, they do the work for you”.

Bella E. McMahon
I am a freelance writer who started blogging in college. I am fascinated by human nature, politics, culture, technology, and pop culture. In addition to my writing, I enjoy exploring new places, trying out new things, and engaging in conversations with new people. Some of my favorite hobbies are reading, playing music, making crafts, writing, traveling, and spending time with my family.