It is the first of Australia’s 12 low-fee “industry” pension funds to totally divest from fossil energy companies.
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Most of NGS Super’s oil and gas holdings were in Australia’s top two independent gas producers, with $75 million worth of shares in Woodside Energy Group and A$50 million in Santos Ltd.
“We’re divesting from oil and gas companies, in particular in the Australian context Santos and Woodside, as we’ve identified those companies as being at risk of becoming stranded in the future as the world decarbonises,” NGS chief investment officer Ben Squires said.
Other companies it sold out of included ConocoPhillips, Hess Corp and Beach Energy, expanding its fossil fuel restrictions to all oil and gas producers and explorers.
NGS Super previously excluded investments in companies that generated more than 30 per cent of revenue from mining or distributing thermal coal or burning it for electricity generation.
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Squires said while the fund had found ways to take advantage of short-term rallies in oil prices to boost returns while not holding oil and gas companies, it made sense to build a portfolio with companies that had clear plans to decarbonise.
NGS Super, an industry super fund for those in the education and community sectors, holds $13 billion, making it one of the smaller of industry super funds. However, it has the most ambitious carbon neutral target among them.