Why it’s time for super to step up on renewables

Our CEO recently wrote a letter to other leaders of super funds calling for them to invest in renewable energy.  

Simon Sheikh, who founded Future Super and is now CEO of our parent company Future Group, wrote to super fund leaders after the election calling on them to throw their weight behind Australia’s transition to renewable energy.  

With Labor re-elected the federal government’s renewable energy targets are here to stay.  

But the government’s net zero plan is not going to be achieved without some serious investment – and that’s where super comes in.  

“The Federal Government has set a renewable energy target of 82% and is making good progress toward achieving this,” Simon wrote.   

“Indeed, in the last quarter of 2024 a milestone moment was reached with coal now providing less than half of Australia’s east-coast energy needs. During this quarter, renewable energy powered 46% of the National Electricity Market.” 

Super could be key to the energy transition  

The super sector represents more than $4 trillion that Australians own. It’s estimated that to reach that target of 82% renewables, with support from the government’s Capacity Investment Scheme, we need around $40 billion of investment. So that's less than 1% the money held in super.  

The Capacity Investment Scheme is part of the government’s plan to transform our energy system and achieve its net zero goal. It’s been designed to provide a long-term revenue safety net, basically decreasing the financial risk for investors in renewable energy projects. That’s perfect for super funds because, naturally, they’re not the type of investors that can take on too much risk since they have to protect their members’ retirement savings. 

So with Labor re-elected, the Capacity Investment Scheme isn’t up in the air any more. Investors have that extra certainty.  

By making a commitment to invest in Australia’s transition to a renewable energy future, superfunds have the power to ensure all Australians will profit from the clean energy boom as our nation rapidly decarbonises.  

What does our future look like?  

Australia has the potential to be a renewable energy superpower. Research Future Group commissioned with Mandala Partners modelled that unlocking the capital in super for investment in green sectors would increase real GDP (gross domestic product) by $170 billion over 10 years and reduce inflation at the same time. It would also support the creation of more than 600,000 new green jobs.  

The government has bid to host the 2026 International Climate Change Conference, COP31. This could be a chance for Australia to show strong policy leadership, matched with investment and backed by businesses. It could be the moment to swiftly shift to a low carbon future.  

Super is here to set you up for retirement, but there’s this elephant in the room that we keep coming back to. What kind of world are today’s workers going to be retiring into?  

There’s so much money in super at this point that through the investments funds make they really do have the ability to shape that future.