The resolution, put to Woodside on April 20, stirred only 8.5 per cent of shareholders into action. Among them, 5.6 per cent voted for the constitutional change, while 2.9 per cent abstained. For this story, Investment Magazine asked 16 of the country’s largest super funds about how they voted. While four funds voted for the resolution, many did not respond to our questions about their reasons for voting. Among the latter were three major retail funds – AMP Capital Investors and Colonial First State, both UN PRI signatories, and MLC – that declined to disclose how they voted, and two industry fund giants and UN PRI signatories, AustralianSuper and UniSuper, voted against the resolution. A spokesman for Australia’s largest investment fund, the Future Fund, said it did not disclose votes on individual shareholdings and that annually its board reveals “the extent to which it has exercised its voting rights and, in broad terms, the nature of its voting”. Before this AGM, The Climate Institute, a non-partisan research organisation, wrote to the 20 largest super funds and asked them if and how they would vote. Just two responded – LGS and MTAA Super – and alongside Cbus and HESTA are the only funds known to have voted for the resolution. Although Cbus, HESTA and LGS are UN PRI signatories, MTAA Super is not but decided to vote for the resolution. TCI’s business director, Julian Poulter, says the defeat of the Woodside resolution augurs badly for the future. In a public statement about the resolutions, he expressed disappointed that some super funds that are signatories to the UN PRI did not support the resolution.

Moreover, some funds, which are signatories to the Carbon Disclosure Project – which advocates such disclosure from companies – also voted against the resolution. He observed that while Woodside’s largest shareholder, Shell, disclosed its carbon price assumptions to its own shareholders, investors in Woodside failed to join the dots and demand greater visibility of climate risk. Speaking on the day of the vote, he said: “This is a very bad day for Australian super funds and their members, who still don’t know which risks are in the Woodside black box.” Criticism also came from James Thier, executive director at Australian Ethical Investment, which runs the CAF. In the same statement, he expressed disappointment at super funds’ low turnout, but noted that some influential investors, advisors and investor groups provided their support. Another positive was the episode demonstrated how shareholder democracy functions in Australia. “This was Australia’s first climate change resolution – though I have no doubt that it will not be the last,” he stated. Some recalcitrance from funds is understandable. There is no established carbon price, and the Gillard Government continues to dither about enforcing a carbon tax. But as long-term investors there is no excuse for not hedging climate risk in their broad strategic asset allocations.

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