Scott Morrison added another track to his greatest hits album this week with his suggestion on the Ray Hadley talkback radio show that some superannuation funds are avoiding investing in coal for political reasons.

The last two politicians who got basic facts about the superannuation industry so wrong, Julie Bishop and Sarah Hanson-Young, were publicly kicked from pillar to post. Either Scott Morrison understands that superannuation funds have to make decisions solely through the lens of providing benefits to members in retirement, or he better study up on our nation’s superannuation laws.

Superannuation funds need to satisfy the sole purpose test. The sole purpose of superannuation funds is to provide benefits to their members in retirement. The test ensures the trustees of superannuation funds are making decisions with the best interest of their members at heart. Sometimes these decisions match the political beliefs of the members of the fund, but investment decisions must be made through a financial lens.

This isn’t to say that the system works as it should. Social and environmental nasties like coal have, in recent years, detracted from the returns of many portfolios. Despite massive short-term losses and a bleak long-term outlook, most superannuation funds in Australia still invest in coal and other fossil fuels.

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Scott Morrison would do well to study the facts on the financial performance of coal and fossil fuels, as would the trustees who take responsibility for managing our retirement savings.

Companies with exposure to fossil fuels have been taking a pummelling. Last week BHP Billiton posted a record loss of $8.3bn. The fossil fuel industry as a whole has written down an estimated $15bn in assets for the 2015/16 financial year, according to research by independent not-for-profit Market Forces.

Many financial analysts, including Citibank, Moody’s and Bloomberg New Energy Finance, have publicly declared that the writing is on the wall for the coal industry. This is not a cyclical downturn; thermal coal is in structural decline.

The US provides the most visible example of the coal industry’s decline. More than half of the major coal companies in the US have filed for Chapter 11 bankruptcy in the last two years. US coal consumption peaked in 2007 and has declined by almost a third since.

Coal is faring little better elsewhere: 25% of countries in the EU have already shut down their last coal power plants, and the UK, Austria and Portugal are aiming to be coal free in under 10 years. Portugal achieved a stellar run of four days straight on 100% renewable energy earlier this year and achievements like this will only keep on coming.

Chinese coal consumption has been in decline since 2013, with the speed of the decline tripling this year. China is the world’s largest coal consumer and the rapid decline of its coal industry is reverberating across the globe. Chinese economic activity has now decoupled itself from electricity demand. The motivation of the Chinese government to tackle their serious air pollution problems and their economic transition away from manufacturing means that coal is unlikely to get back up again.

China has gone further than Australia by placing a moratorium on new coal power plant approvals and at least 15 provinces have been ordered to halt construction on previously approved coal power plants. With many coal plants already operating at below 50% capacity, Beijing is seeking to slow the oversupply of coal by closing up to 1000 mines this year.

As the global renewables transition gains pace, investors are increasingly talking about the growing risk of fossil fuels investments becoming stranded, or, in other words, the emergence of a carbon bubble.

Current fossil fuel company valuations incorporate fossil fuel reserves far greater than what can be safely burnt to stay below 2°C. An analyst at Barclays has suggested that the fossil fuel industry risks losing up to $33tn in revenue as these reserves are forced to stay in the ground.

Given all of this evidence the question must be raised: how could continued investment in coal reconcile with the fiduciary duty of superannuation fund trustees?

In the last financial year more than half of the 20 worst performing ASX 100 stocks had significant exposure to fossil fuels. The Thomson Reuters/Future Super fossil fuel free index outperformed the ASX 300 in the same year by over 14%. And superannuation funds that divested from coal outperformed industry averages.

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The evidence from the last financial year reaffirms the investment thesis of ethical investment managers: companies with better environmental, social and governance records can also be better financial performers.

A global transformation in the way human societies produce and consume energy is underway, with serious implications for fossil fuel investments. Superannuation trustees have a responsibility to act to safeguard the retirement savings of ordinary Australians from exposure to industries in decline. Rather than being merely political, fossil fuel free investment strategies are proving to be the sensible approach for responsible investors.

As Australia’s treasurer, Scott Morrison should know better than to chastise superannuation funds who choose to protect their members’ savings from the decline of coal and fossil fuels.

Luckily Australians can shop around and make up their own minds on which super fund is best protecting them from the impacts of climate change on their portfolio.