HESTA has dropped Origin Energy from a watchlist of carbon-intensive companies after the firm said it would sell its stake in the Beetaloo Basin gas project and cease gas exploration activity as the super fund looks to actively manage the carbon emissions of its investments.
The $68 billion super fund has taken a more active and public management strategy with portfolio companies in relation to climate risk. It has a $60 million stake in Origin, amounting to 0.6 per cent.
“We believe Origin has articulated a climate strategy consistent with a 1.5C pathway and that their change in strategic direction will better support their ambitions to lead the energy transition through cleaner energy and customer solutions,” said Kim Farrant, HESTA’s general manager, responsible investment.
However, there was more Origin Energy could do to help workers and communities affected by the energy transition away from fossil fuels, Farrant said. “It’s our view that Origin could play a more active role in supporting a just transition for affected communities” she said.
HESTA last month placed four major Australian energy companies AGL Energy, Origin Energy, Santos and Woodside Energy Group on a watchlist over concerns about the alignment of their climate strategies to the Paris Agreement goals. The four portfolio companies were subject to closer monitoring and engagement.
The fund recently increased its 2030 carbon reduction target to 50 per cent from 33 per cent and committed to investing 10 per cent of its portfolio in renewable energy and sustainable property.
It had also written to the chairs and chief executives of Australia’s top 300 listed companies in its portfolio encouraging them to deliver a climate strategy and plan to manage social inequalities and biodiversity risk.