Australia’s largest superannuation fund – AustralianSuper – has announced that, from next month, it will offer its members an option that will restrict investments in companies with fossil fuel reserves. The decision will see the fund dump between $190m and $235m worth of fossil fuel stocks.

This is welcome news, as AustralianSuper joins the ranks of dozens of funds that are getting out of fossil fuels. But this is still a far cry from serious climate action, as less than 2% of members will have their fossil fuel exposure partially reduced.

The fund will combine its three existing sustainable investment options, creating a new option with approximately $2 billion of assets under management. However, AustralianSuper manages in excess of $92 billion, so this decision means 98% of their members still have their retirement nest eggs invested in dangerous climate change. Climate change is a systemic risk – it shouldn’t be left to members to opt in or out of the enormous risks it poses to all of us.

AustralianSuper joins industry funds First State Super, HESTA and Local Government Super in restricting investments in fossil fuels. However, AustralianSuper’s restriction will be based on fossil fuel reserves rather than a revenue or net asset value threshold. This will see shares in diversified companies like BHP Billiton, Rio Tinto, Seven Group and Wesfarmers sold, while many utilities and coal transporters remain. Furthermore, members who switch to the new option will still be exposed to fossil fuel infrastructure and debt.

Australia’s superannuation industry has lost billions of dollars on investments in coal, oil and gas shares in the last two years. A recent study from Market Forces found that fifteen major retail, industry and public sector fund options have lost an estimated $5.6 billion – or up to $3024 per member – on fossil fuel equity investments in 2014 and 2015. Members of AustralianSuper’s default option lost an estimated $848 each on fossil fuel investments over the same period.

AustralianSuper’s 2 million members deserve to be protected from the enormous risks that climate change poses to their retirement savings. AustralianSuper is a member of the Investors Group on Climate Change (IGCC) and lauds its engagement with companies through the Australian Council of Superannuation Investors (ACSI). The fund has stated that it prefers engagement to divestment, yet the successes of its engagement are not disclosed. Additionally, proxy voting is an important part of active management. A quick scan of AustralianSuper’s proxy voting record reveals that the fund voted for just 9 of 32 shareholder resolutions relating to climate and sustainability in 2015.

AustralianSuper is a signatory to the UN Principles for Responsible Investment (UNPRI). Yet it hasn’t signed up to the Montreal Pledge, which mandates organisations to disclose the carbon intensity of their portfolio (CO2e/$AUm) annually. Though imperfect, disclosure of this data would allow members to compare AustralianSuper to its peers, and gauge its exposure to carbon intensive assets year on year. Super funds that are genuine about responding to climate change should be aiming to reduce their carbon intensity over time.

To date, over 500 institutions globally representing more than US$3.4 trillion in assets under management have made some form of commitment to divest from fossil fuels. These include institutions like the Rockefeller Brothers Fund, the universities of Stanford and Oxford and the cities of Paris, Canberra and Newcastle. In Australia alone, already 16 local governments have committed to divest. In fact, of the more than 500 divestment commitments globally, more than one fifth are from Australia.

In taking this first step, AustralianSuper has joined the unstoppable global fossil free movement, but by limiting divestment to a single option, the vast majority of its members are not provided with credible protection from climate change and their money continues to be used to support activities that worsen global warming.

As the largest super fund in the country, AustralianSuper can and should be an industry leader.. However, that leadership would be far more effective if AustralianSuper board members and executives were publicly vocal about the need for effective action on climate change. The fund’s 2 million members, 16% of the national workforce, deserve as much.

If you’re a member of Australian Super and you’re dissatisfied with their approach to managing climate change and fossil fuels – contact the fund here.

350.org and Market Forces will continue to support AustralianSuper members in their campaign for full divestment. If super funds are serious about protecting their member’s future, they must implement a clear plan to progressively divest from all fossil fuels across their entire portfolio.