Controversial weapons are ones that can have a severe impact on civilians, and are generally banned under international treaties. Land mines, cluster bombs and nuclear weapons are deemed to be particularly controversial because of their indiscriminate impacts on civilians and the disproportionate harm they cause in the case of land mines for many years after a conflict has ended.
Despite being widely considered to be controversial and often prohibited by international treaties, these weapons are still produced in some parts of the world. Vision Super avoids investing in any companies directly involved in the production or sale of these controversial weapons. We do not believe their harm can be reduced through engagement.
According to the World Health Organisation, tobacco kills more than 8 million people every year globally and costs society an estimated USD $1.4 trillion annually in medical expenses. And according to the International Labour Organisation (ILO), about 108 million children, or 70% of the children involved in child labour, are working in the agriculture sector, many of which are believed to be involved in the production of tobacco. Tobacco also directly harms workers – people involved in the harvesting of tobacco leaves are prone to acute nicotine poisoning, as they absorb nicotine through their skin while handling tobacco plants. This is particularly serious for children, who because of their smaller size are more at risk.
The deadly nature of this product and the human rights abuses common in this industry lead us to believe that the future profitability of tobacco faces material legislative, regulatory, and litigation risks. Tobacco also causes immense human suffering. That is why Vision Super has divested from tobacco producers and signed up to the tobacco free finance pledge. Taking the pledge has allowed Vision Super to become “verified tobacco free”, reinforcing our position as a values-based, superannuation fund.
For more information on the tobacco free finance pledge , visit Tobacco free finance signatories
Tar/oil sands are a combination of water, clay, sand and bitumen, which is a heavy, thick black oil. Tar sands can be mined to extract the oil-rich bitumen, which is then refined into oil. Tar sand deposits are mined because the bitumen in tar sands cannot be pumped from the ground in its natural state. Extracting tar/oil sands and converting it into a usable fuel is energy and water intensive. The process also creates toxic air, waste and water pollution.
Mining tar sands also generates a lot of dangerous carbon pollution because it is energy-intensive. The greenhouse gas emissions from tar sands extraction and processing are significantly larger than for conventional crude oil. Tar/oil sands mining encroaches on Indigenous lands and contaminates the environment and wildlife these communities depend on for their culture and way of life. Vision Super does not directly invest in tar/oil sands mining because we believe the harm it causes cannot be mitigated, and because we believe regulation will eventually catch up with the damage it does and therefore it will not be a good long-term investment. Other energy sources are much more economic and do not have the damaging effects of tar/oil sands.
Thermal coal is black coal used for electricity generation. Of all fossil fuels, coal emits the most carbon dioxide per unit of energy. There are numerous damaging environmental impacts of coal that occur through its mining, preparation, combustion, waste storage, and transport. Coal-fired power plants generate large amounts of carbon dioxide emissions, which are the principal human cause of global warming and climate change. Air pollution from coal-fired power plants also includes sulphur dioxide, nitrogen oxides and heavy metals, which lead to smog and acid rain. We need to be able to cool our houses without turning up the thermostat on the entire planet. Like with tar sands, we do not believe there is an economic case for investment, and believe the harm burning coal to make electricity generates cannot be mitigated.
Oil and natural gas are fossil fuels. Oil is refined to produce transport fuels, as well as oils used for heating, and the by-products from oil refining are used in the production of plastics and chemicals. Natural gas is used to supply power plants that generate electricity and is also used in the manufacturing and transport industries. Nearly all pesticides and many fertilisers are made from gas, oil or oil by-products. Most companies are factoring in phasing out these fossil fuels, recognising that we need to make significant progress in exiting these fossil fuels to avoid dangerous climate change. However, some companies have declared net zero targets by 2050, but are still intending to materially increase their production profiles over the 2020’s. We believe that during the transition to net zero carbon, there will be a large impact on exposed industries and companies, and there is a material risk that some oil and gas assets will become stranded assets and the asset values will have to be written down. Vision Super places limits on how much of the investment universe it is prepared to exclude in order to not risk constraining our range of potential investments. Within these limits Vision Super divests from oil and gas producers.
Vision Super has a divestment framework that the Board uses to ensure we make decisions about whether to divest from particular products in a consistent and ethical way, and that doing so is in the long-term financial interests of our members.
As part of this framework, the Board will:
Vision Super maintains a list of companies that we consider to be prohibited investments. The list is reviewed regularly by the Vision Super Climate Action team and Investments team. We use ESG Research Provider MSCI to identify companies that are involved in controversial weapons production and the manufacture of tobacco. Where appropriate we supplement this with our internal research and company engagement. Discretion as to whether or not to prohibit investment in companies or entities lies entirely with the Vision Super Board. The list is reviewed annually and where new companies are identified we seek to divest our holdings within a reasonable timeframe.
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