$185 Billion Australian Retirement Trust Plans Thermal Coal Divestments

The Australian Retirement Trust, the second largest superannuation fund in Australia, announced on Thursday that it would exclude thermal coal companies from its investments. The retirement trust manages A$280 billion ($185 billion) in assets.

The exclusions were announced in a May 2024 product update.

The exclusion on thermal coal, which the fund defines as companies engaged in the mining of thermal coal and its sale to external parties is effective July 1, 2024. The fund’s threshold for excluding companies is if they generated more than 10% of their revenue from thermal coal in the most recent year of financial reporting.

The fund currently excludes tobacco companies with a 5% revenue threshold and companies involved in the manufacturing of landmines and cluster munitions, as well as companies that own or have ties to these companies.

The exclusion on thermal coal will not apply to companies that derive their revenues from coal used in the production of steel, coal mined for internal power generation, intra-company sales of mined thermal coal, or coal trading.

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The Australian Retirement Trust was founded in 2022 by the mergers of SunSuper, QSuper and the Australian Post Super Scheme and provides retirement services for its two million members. The fund’s balanced investment option, which adopted the investment strategy of its predecessor, Sunsuper Balanced investment option, reported an annualized 8.3% over the past 10 years.

In the U.S., some of the largest public pension funds, including the California Public Employees’ Retirement System and California State Teachers’ Retirement System, have divested from thermal coal.

And in 2023, the Institute for Energy Economics and Financial Analysis reported that more than 200 “globally significant financial institutions,” including banks and asset managers, had established exclusion policies for coal-related assets.