Can super make Australia a renewables superpower?
By Leon Gettler >>
AUSTRALIA’s $3 trillion superannuation industry could turn Australia into a renewable energy powerhouse and steer the country closer to net zero emissions before 2050, it has been claimed.
Simon Sheikh, the founder of fossil-fuel-free super fund, Future Super, said the scope for super was immense.
Mr Sheikh said climate change was a major problem that needed to be addressed on a ‘warlike footing’ which meant using every lever available – whether that is the money in super accounts investing in renewable energy, or governments directly building projects and setting the regulatory frameworks for markets.
“A warlike footing means it all needs to happen and not in 2050,” Mr Sheikh told Talking Business.
He said superannuation would play a big role. With $3 trillion worth of assets under its control, Australia’s superannuation sector was one of the largest pools of capital in the world that Australians actually control – as it is “their money and their super”.
SUPER CAN POWER RENEWABLE BASELOAD
Mr Sheikh said research from the University of Technology Sydney found that just 7.7 percent of Australian superannuation savings, between now and 2030, could fully fund the transition to a 100 percent renewable energy powered electricity grid.
“Clearly, superannuation is the pool of capital that needs to be unlocked to take action on climate change,” Mr Sheikh said.
“Starting now, we all switch our super to those providers that are investing in renewable energy.
“The big opportunity here of course is for governments to set the policy settings to such that they are attracting and pushing superannuation funds to invest in nation-building infrastructure.
“The investment community sees great opportunity in making money from the transition. Big transitions of whole economies and whole societies, moving from one energy system to another, create huge opportunities to deploy capital and so the investment community broadly I think is up for the challenge.”
Mr Sheikh said business was now clearly getting behind the push towards net zero emissions.
“Right now, I don’t think you can name any businesses in the ASX 100 that aren’t working feverishly on how they’re going to change their business model to work in a net zero world,” he said.
“You’ve got farmers lobbying out there and the farming community making big changes, you’ve got the business community out there making big changes, you’ve got individuals making big changes but at the moment, it’s happening without any co-ordination.”
SUPER FUNDS MAKE THE CLIMATE CASE
What’s needed he said, was for super funds to make their case for zero emissions, a price on carbon and the government to show some clear leadership on this issue.
Mr Sheikh said financial markets and superannuation funds create a space for the government to play a role. The companies and the super funds could put pressure on the government to adopt its net zero pledge ahead of 2050.
“When you’ve got the business sector taking action on climate change. The business community are a core constituency for the Liberal Party and the reality is, we can drive what businesses do,” Mr Sheikh said.
“That’s the power of our money. If we move our superannuation and demand our superannuation funds make investments in progressive causes like climate action, it means those super funds go and pressure the companies they’re investing in to say, ‘We’ve made a net zero pledge, where is your net zero pledge?’”
Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.