Member accuses UniSuper of greenwashing

UniSuper was recently hit with fresh allegations of greenwashing by a member who issued a complaint to ASIC in relation to certain holdings.

The member believes UniSuper marketing two of its three responsible investment options as 'sustainable' places too much onus on individual members to investigate further how returns are generated in these portfolios. In particular, he points to the options' "significant investments" in Transurban Group.

Financial Standard was unable to verify the current size of the investments in Transurban Group due to an ongoing system outage at the fund, however Portfolio Holdings Disclosure data from December 2023 shows about 1.81% of the Sustainable Balanced portfolio is in Transurban Group, while 1.38% of the Sustainable - High Growth option is. UniSuper also owns 10% of Transurban Chesapeake, located in the Greater Washington area.

"Transurban Group's business model relies on increasing road traffic, which increases climate and other pollution," the member said.

"Road transport causes about 20% of Australia's total greenhouse gas emissions. While other sectors, such as electricity generation, are reducing their emissions in line with Australia's net zero target, road transport emissions continue to increase - fueled largely by continued urban motorway expansion.

"Toll roads are clearly not environmentally sustainable, so UniSuper should not market products as sustainable when they include those sorts of investments."

He added that he is concerned that UniSuper members "may take the sustainability claims of the company at face value," saying he thinks most members in the option "would be appalled to know that toll road profits were contributing to their earnings."

He said he believes the labelling of the options is tantamount to misleading and deceptive conduct and called on ASIC to investigate.

While not specific to toll roads, UniSuper does screen out any companies that derive more than 10% of their reported revenues from fossil fuels, specifically the exploration or production of thermal coal or oil and gas.

In a statement, UniSuper said: "Transurban meets the screening criteria applied to investments in the Sustainable Balanced and Sustainable High Growth options as noted on our website and in our PDS. We see Transurban as having strong business standards and practices as well as a considered approach to environmental, social and governance issues."

"In our 2023 Climate report we gave Transurban our highest rating for its emissions reductions targets and its actions."

Managing lawyer at Environmental Defenders Office Kirsty Ruddock believes the issues presented in the complaint to ASIC are aligned to those raised by ASIC's own greenwashing cases against Vanguard, Mercer, and Active Super.