Why we screen (Santos)
There are some companies that other super funds might invest in that Future Super straight up rules out.
Recently, one of those companies has been in the news (for all the wrong reasons, in our opinion).
Santos is an oil and gas company that’s listed on the ASX.
Santos has been in the news recently, because First Nations people say two of the company’s new projects breach their human rights.
Tiwi Islander, Larrakia and Gomeroi/Gamilaraay Traditional Owners have sent letters to super funds that invest in Santos. They argue that the super funds, as shareholders, must do something to stop these projects going ahead.
The two projects in question are:
- The Barossa Gas Project: Santos plans to drill for gas offshore, in Australian waters north of Darwin and near the Tiwi Islands. The Tiwi Islander and Larrakia Traditional Owners are fighting against this project.
- The Narrabri Gas Project: Santos will drill for gas in northern NSW, transporting the gas to Sydney via a pipeline. The region impacted by the project overlaps the Pilliga State Forest and borders the Pilliga State Conservation Area. Gomeroi/Gamilaraay Traditional Owners have been fighting against this project.
Gomeroi/Gamilaraay Traditional Owner Miah Wright explained why she is fighting against the Narrabri gas project.
“Water/Gali is the source of all life. It is Yinarr/Warringa (Gomeroi women) Lore to hold a spiritual connection with all water. The majority of cultural heritage sites are found within 200 metres of a waterway, maintaining and sustaining our way of life. If Santos gets its way with the Narrabri gas project, invested in by major Australian super funds, they will pollute our sacred water that sustains all life.”
Santos investors held to account
Investors have the ability to influence the actions of companies, by voting on shareholder actions or by threatening to sell their shares if a company doesn’t live up to expectations.
This is why Traditional Owners are asking super funds that invest in Santos to step up.
Equity Generation Lawyers is supporting the human rights campaign. Principal lawyer David Barnden explains why.
“The Traditional Owners are asking super funds that do invest in Santos whether they agree with human rights principles, and to publish their views on Santos.
“Members, who have the legal right to request information from their funds, have supported this by asking their funds to provide information on their human rights policy and to justify their ongoing investments in Santos.
“In the current circumstances, Santos is threatening human rights violations and there is also a big question about how financially sensible those growth projects are.”
Why Future Super does NOT invest in Santos
Jackie Radisich is senior ethical investment analyst, part of Future Super’s impact team. An important part of Jackie’s work is screening out companies that don’t meet Future Super’s criteria for investment.
Q: Why doesn’t Future Super invest in Santos?
Santos is one of the largest oil and gas companies in Australia. Future Super excludes fossil fuel companies from our investments - we exclude any company that derives revenue from owning fossil fuel reserves or is engaged in the extraction of fossil fuels.
As Santos is in the business of extracting oil and gas, as well as owning oil and gas reserves, they are not deemed investable for our fund.
Q: Why screen them out rather than trying to help them change? If we were invested could we stop projects like Narrabri and Barossa going ahead?
To divest or engage with the fossil fuel industry is a longstanding debate in financial circles. In short, our Theory of Change rests on the belief that engaging with companies whose sole or primary business is selling hydrocarbons is ineffective.
Those who believe engaging with fossil fuel companies is possible, often argue that these companies will use new technology to capture their carbon emissions. The fact is, these technologies are unproven.
Recent findings suggest that if fossil fuel companies continue with their planned projects, they will burn “carbon bombs” which will push the world into disastrous global heating.
We believe engagement can lift the bar for companies which can co-exist with a sustainable society, but only when it has clear goals and thresholds and when divestment (pulling money out of the company) is followed through on if engagement is not successful.
The reality is, no fossil fuel company has a science-based transition plan compatible with the Paris Agreement’s goal to limit global heating to 1.5°C since pre-industrial records. Additionally, claims around funds influencing companies on sustainability claims have come under scrutiny by the regulator, which argues that any super funds making such claims need to be able to back that up with evidence of how they are wielding that influence and whether it has been effective. Shortly after this announcement from the regulator, several funds deleted climate commitments from their websites.
See http://www.futuresuper.com.au for more information about our screening and investment processes, and what we mean by fossil fuel companies and investments.