Some of the nation's largest superannuation funds have been accused of failing to use their influence over oil and gas companies to maximise shareholder value and safeguard retirement savings.
Fossil fuel giants Woodside Energy and Santos have been urged by critics to return significant capital to shareholders rather than invest billions in more oil and gas production, which is a decision that must be made by a company's board of directors.
Big institutional investors could push for leadership change on boards but many failed to use their voting power in 2024, according to an analysis of the top 30 super funds released on Monday by a shareholder activist organisation.
"Australia’s top super funds must stop greenwashing and start taking decisive action to hold company directors accountable for risky and harmful gas expansion," Market Forces analyst Brett Morgan said.
"Top super funds are backing down when they must be using all the tools at their disposal," he said.
Mr Morgan slammed one fund's efforts to drive change at Woodside as a "monumental failure" and accused others of being "too busy being conned by gas industry greenwash" to push for change.
A fund watchlist covers companies that are urged to explain how new or proposed projects fit within a global scenario of limiting warming to 1.5 degrees.
Since being on the watchlist, Woodside has opted to develop the Trion resource in Mexico which the energy giant says will deliver enduring shareholder value and has carbon intensity that is lower than the global deepwater oil average.
Critics say the project will add more than 200 million tonnes of carbon pollution.
Woodside completed the acquisition of Tellurian and its US Gulf Coast Driftwood LNG project in 2024, which critics say adds more fossil fuel capital expenditure and emissions risk.
"The need for ongoing supply, in particular of LNG to Asia, as part of the energy transition has been well documented, including in the Australian Government’s Future Gas Strategy," a Woodside spokesperson told AAP.
Corporate targets reflect Woodside's stated commitment to responding to climate change, including an emissions reduction target of 30 per cent by 2030, and investment target of $US5 billion in new energy products and lower-carbon services.
"We take the views and perspectives of our investors very seriously, and have ongoing engagement with them," the spokesperson said.
Santos has also been accused of making investment decisions that shareholder activists say appear to generate minimal value for shareholders.
Briefing investors after a period of major capital investment in the Barossa project north of Darwin and Pikka project in Alaska, Santos in November reiterated a commitment to prioritise shareholder returns when new production comes online.
