Thursday, September 29, 2016

Super funds under pressure to end executive bonuses linked to more fossil fuel projects

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Source: "Digging Deeping" from Market Forces

Australia's big superannuation funds are under pressure to veto bonuses to energy company executives who are rewarded for expanding traditional fossil fuel or carbon emitting projects.

A report from the environmental advisory firm Market Forces says super funds are "hoodwinking" investors by voting for multi-million dollars bonuses despite committing themselves to climate friendly policies.

Market Forces executive director Julien Vincent says superannuation funds are being hypocritical in approving bonuses for energy executives whose remuneration is explicitly linked to pursuing and establishing new fossil fuel exploration projects.

"It's an absolute hypocrisy for funds to be saying they are helping to steer the economy in a direction that's compatible with limiting global warming and the incentivise more fossil fuel exploration on behalf of their members," Mr Vincent told The World Today.

"Super funds love to tell their members that they're engaged on climate change and they're working with companies to get results and transform companies and transform the economy.

"But what we've found is that they're actually voting for the executives of fossil fuel companies to get fat bonuses to go and explore for more fossil fuel reserves when we've got far more than we can actually burn for a safe climate."

The report identifies seven ASX-listed energy companies that have awarded bonuses relating to new fossil fuel projects including Santos, Oil Search and Karoon Gas Australia.

The report titled "Digging Deeper" urges superannuation funds to use their voting power at Annual General Meetings to vote against bonus deals.

"Super funds actually this money on behalf of millions of Australians so this is actually our money being used to vote for fossil fuel executives getting bonuses to damage the environment and worsen climate change," Mr Vincent said.

"It's the old adage - money talks. And we're talking about assets worth about 20 percent of the ASX. That's a huge chunk of change there and that's very influential.

"Many investors have started writing to companies saying you either need to change your business model or do the decent thing and start returning capital to shareholders."

The Australian Council of Superannuation Investors has rejected the claims of hypocrisy contained in the report.

An ACSI spokeswoman told the ABC the council is "is engaging with resources companies on behalf of its members on the transition to a low carbon economy."

ACSI is also calling on companies "to provide greater levels of transparency around the way bonuses are calculated to enable an informed assessment to be made."

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