Australia’s Pension Funds Shun China Bet Big on Fossil Fuels

Must Read

Australian pension funds are investing heavily in fossil fuels while avoiding investments in China, despite mounting geopolitical tensions.

Two significant Australian pension funds decreased their investment in Chinese stocks. They increased their investment in the country’s fossil fuel industry during the last half of 2022, as stated in filings released on Thursday.

According to the mandatory portfolio disclosures published on fund websites, the value of the equities listed in China and Hong Kong at AustralianSuper and Aware Super, which manage about A$400 billion ($267.24 billion) collectively, decreased by approximately 25% each. Additionally, the total share counts dropped as well.

The two funds purchased around 14 million additional shares of Woodside Energy Group, Australia’s biggest independent natural gas producer.

Australia’s pension sector, valued at A$2.3 trillion, is expanding its teams of stock pickers and establishing offices in London and New York. Recent disclosures show how the sector’s significant investors are positioning themselves regarding China and the shift towards renewable energy on a global level.

Activist investors recently accused significant Australian pension funds of not pressuring fossil fuel producers like Woodside to decarbonise. These disclosures surfaced a few days after the accusation.

AustralianSuper, through an external mandate with IFM Investors, increased its position in thermal coal producer Whitehaven Coal by approximately 40%, to a total of A$21 million. This comes more than two years after the company had sold stock from its actively managed portfolio.

AustralianSuper collaborates with companies to comprehend their strategies for transitioning operations towards providing long-term benefits in a low-carbon economy. Additionally, a spokesperson from the fund emphasised that gas was essential for facilitating this transition.

“We are actively engaging with energy companies and will continue to use our positions as long-term investors to advocate for economic policies and practices that support a transition to a lower carbon economy,” said the spokesperson.

Aware Super also purchased additional shares of Woodside Energy Group, increasing its stake by 33%. In addition, the fund disclosed nearly A$1 million worth of new investments in the fossil fuel companies Oil Search, Santos and Beach Energy.

“We regularly assess and modify our strategy in China, as well as in public and private equity markets, based on potential risks and opportunities,” Aware Super’s spokeswoman said.

If current trends continue, Australia’s pension funds are betting heavily on the country’s traditional industries while avoiding confrontation with China. This strategy may be successful in the long term, but experts caution that this could eventually backfire if geopolitical tensions continue to rise.

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img