At least $3.4 billion of Australian retirement savings are being deployed by super funds into companies involved in making nuclear weapons.
New research from The Australia Institute and Quit Nukes finds that despite claiming not to invest in ‘controversial weapons’, 13 of the top 14 Australian super funds are still investing in nuclear weapons companies – not to be confused with nuclear energy.
One of the 14 funds, Hostplus, has excluded such investments across its portfolio since December 2021.
The report analyses financial returns and finds that the exclusion of nuclear weapon companies from portfolios has an immaterial impact on returns.
The Australia Institute Research Manager Alice Grundy says the most frustrating thing about the lack of progress in this area is that divesting out of nuclear weapons companies has an immaterial impact on investment returns.
“Your super fund could divest your money from nuclear weapon companies without materially impacting your returns. So long as nuclear weapons exist, nuclear war is an ever-present risk. Its impacts would be catastrophic,” Grundy says.
“Even a limited nuclear war, involving say 250 of the over 12,000 nuclear weapons in the world, would kill 120 million people outright and cause nuclear famine, putting 2 billion lives at risk. There would be massive impacts on global supply chains and manufacturing. The long-term financial implications should be factored into decisions about where to invest Australian super.”
Quit Nukes Director Rosemary Kelly says what makes this baffling is that investing in nuclear weapon companies is “just completely unnecessary in the broader scheme of things”.
“It’s frankly unconscionable to sell super fund members a responsible investment option and then use their money to invest in nuclear proliferation. Superannuation funds should divest immediately from weapons manufacturers who produce nuclear weapons,” Kelly says.
“If you’re a member of 13 of these 14 leading funds you can request that your fund divest or threaten to take your savings elsewhere. Super funds are being sneaky by boasting of policies to exclude ‘controversial weapons’ but not counting nuclear weapons as “controversial.
“That’s pretty hard to swallow when you consider that most ESG advisors now consider nuclear weapons as controversial weapons, given the UN Treaty on the Prohibition of Nuclear Weapons that came into force in 2021.”
In December 2023, the Australian Securities and Investments Commission (ASIC) reprimanded Morningstar for being “liable to mislead” investors in its Morningstar International Shares (Unhedged) Fund after it invested in several weapons companies, in contravention of its stated environmental, social and governance (ESG) policies.
The corporate regulator issued infringement notices after Morningstar self-reported holding securities in companies its own analytic arm, Sustainalytics, identified as having involvement in the development or production of nuclear weapons or providing core components for them.
ASIC noted at the time the product disclosure statement for the product said it excluded certain investments based on Morningstar’s ESG policy, which had stated it would not have exposure to such weapons companies.
Write to Adam Orlando at Mining.com.au
Images: iStock
