An Open letter to Telstra Super on fossil fuel investments, particularly Santos and Woodside Energy

The following email to one of my superannuation funds, Telstra Super, was partly generated from the latest Market Forces Climate Wreckers Report. It is easy to generate a letter with specific information to your Super Fund. I added substantially more contextual information to my email. But a short personal note with reasons on the necessity for divesting for our future can also have an impact. 

Every Super member has an opportunity to change how their superannuation is invested, divesting away from fossil fuels to clean energy solutions.

To TelstraSuper,

Time to End all investments in the world’s worst fossil fuel expanders

I’m contacting you to demand that you end the fossil fuel expansion plans of companies you invest my retirement savings in, and publicly divest from them if this fails.

I have particular concerns that your engagement with Woodside and Santos to adopt a change in business, has failed. These companies are almost entirely dedicated to Fossil fuel production and expansion. Your continued investment of member superannuation money  in these companies under the rubric that you can engage and get them to adopt net zero emissions by 2050 is fatally flawed and is not in keeping with your fiduciary duty to act for members long term behalf.

Europe Diary: Nantes, the abolition of slavery and climate change

On Sunday I visited the Memorial to the abolition of slavery in Nantes and was deeply moved. It is located on the bank of the Loire River, opposite the Palais de Justice that stands on the Ile de Nantes. The city of Nantes has looked into the darkness of it's past in abuse of human rights and sought to document and reflect on that history. There are lessons here in the anti-slavery campaign for the climate change movement.

Universities score poorly on #climatechange risk investment

While climate science has been a prominent concern of many university based researchers, these same venerable education institutions have failed to walk the talk in regard to applying climate change science to climate risk investment of their financial assets. A new global survey of universities has found that the overwhelming majority are financially exposed to the risk of stranded assets and physical impacts of climate change.

The global survey by the Asset Owners Disclosure Project was sent to 278 universities during the first half of 2014. Just six universities chose to formally respond to the survey. Research analysts then analysed public information on each university's climate risk investment policies and scored all universities according to policies and performance on: transparency, risk management, low-carbon investment, active ownership, and investment chain alignment.

"This is the first survey in the world to look holistically at universities' endeavours to manage the systemic risks posed to their portfolios," said Dr John Hewson, Chair of the Asset Owners Disclosure Project.

"It is shocking that universities - thought to be at the cutting edge of innovation and problem-solving - cannot grasp the simple mathematics of wasted capital and the need for more transparency in investing, not less," said Dr Hewson.

The report found that 98% of universities are doing little to nothing about climate change risk in their investment portfolios, receiving a D or X grade. Over 75% of universities had no publicly available information on their websites regarding their climate risk management earning an X grade. D Grade is where climate change risk management is rated as poor, and X grade is where no information could be found to rate climate change risk processes at all.

City of Moreland an Australian climate leader in decision to divest

Original article on Climate Action Moreland website.

Tonight the City of Moreland has become the first council in Victoria to rule out direct investments in fossil fuels and the first council in Australia to start developing a strategy to move investments away from financial institutions that fund fossil fuel developments.

Moreland joins around 30 cities internationally which have made similar commitments, including Seattle, Dunedin, and Oxford.

It follows recent announcements from Industry superannuation funds HESTA and Local Government Super, statements from ANU and Sydney universities restricting coal investments, and decision by the Uniting Church in Australia and the Perth Anglican diocese to divest from high carbon fossil fuel and mining investments.

Divestment: Local Government Super add negative filter for coal

Local Government Super, an industry superannuation fund covering local government workers in NSW, has announced increased negative screening for high carbon assets such as coal mining and coal power generators, specifically citing the impact of climate change for this decision.

The additional negative screening will exclude companies from its portfolio with a material exposure to ‘high carbon sensitive’ activities such as coal and tar sands mining, as well as coal-fired electricity generators. The threshold for this screening has been set at a minimum of one third of company revenue.

The Super fund has used negative screening since 2000 regularly reviewing this policy and it's application. The policy has limited investment with companies involved with tobacco, gambling, armaments and old growth forests, as well as excluding companies with poor management of environment, social and governance (ESG) risks.

Local Government Super has about $8 billion in investments. The policy will mean about $25 million will be divested from various mining and energy companies, including $15 million in shares of AGL Energy and Whitehaven Coal.

Australian National University divests from 7 fossil fuel and mining companies

The Australian National University has announced divestment of $16 million in shares in seven Australian fossil fuel and mining companies.

The Council of the University has agreed to a proposal by Vice-Chancellor Professor Ian Young AO to divest following an independent review of equity investments under its Socially Responsible Investment Policy conducted by the Centre for Australian Ethical Research (CAER).

The companies the university will be divesting from are Iluka Resources, Independence Group, Newcrest Mining, Sandfire Resources, Oil Search, Santos and Sirius Resources. The investments amount to around 5.1 per cent of the University’s Australian equity holdings and approximately one per cent of its total investment holdings.

HESTA Super Fund restricts thermal coal investments

The first major Australian industry superannuation fund advised on Friday they were restricting thermal coal investment due to the growing risk of 'unburnable carbon' with the growing global push to limit global warming.

HESTA, the super fund for employees in health and community services, announced a progressive implementation of a restriction on investments in thermal coal, across all it's funds, not just it's ethical fund. HESTA has $29 billion under funds management with 785,000 members and 155,000 employers.

Anne-Marie Corboy, HESTA Chief Executive Officer, said that this was an increasing restriction as part of the Fund’s ongoing response to the increasing impact of climate change on its long-term investments. In a media statement she commented:

“This ‘unburnable carbon’ is likely to become an increasing risk in the medium to long term, especially for companies heavily invested in thermal coal, or those seeking to develop new long-term assets.

“HESTA is of the view that, new or expanded thermal coal assets face the highest risk of becoming stranded before the end of their useful life.

“It is not prudent, nor in the long-term interest of members, to invest in the expansion of these assets.

“The push to limit the impact of global warming requires economies to move to a lower-carbon intensive future and investors have an important role to play in this transition.

“HESTA believes that further investment in developing new, or expanding existing, thermal coal reserves is inconsistent with this imperative to reduce carbon emissions.”

Your Superannuation is Destroying the Planet - John Hewson fights back on climate

Superannuation for most of us is compulsory saving that we really don't worry too much about until we start getting closer to retirement. We leave it to the investment managers and superannuation trustees to judge the benefits and risks in investment strategies they put forward.

But what if their assessments of risk and investment strategies are all short term market oriented or only consider past trends. This is the problem posed by climate risk and the carbon bubble. The carbon bubble represents a major shift in resource exploitation and energy production, and a social and technological transition required. Australia's headlong rush for coal expansion risks stranded assets. The economic risks of a carbon bubble and stranded assets have been warned by Carbon Tracker, PriceWaterhouseCoopers (PwC) and International Energy Agency (IEA).

Global pension funds control about $30 trillion in assets. It is estimated that over 55 per cent of pension contributions are invested in high-risk, high-carbon assets with less than 2 per cent being invested in low-carbon assets.

With climate change science indicating that 80 per cent of known fossil fuel reserves need to be left in the ground to maintain a safe climate, there is an enormous carbon bubble of overvalued assets. This poses a huge problem: when this carbon bubble bursts it will substantially downgrade the value of these superannuation investments, that is, your and my future retirement income.

Australia's coal expansion risks stranded assets

Australia's headlong expansion of coal mining for export carries substantial investment risks of stranding assets says a new report from Oxford University. Previous warnings regarding potential risks of a carbon bubble have been made by Carbon Tracker, PriceWaterhouseCoopers (PwC) and International Energy Agency (IEA).

During December 2013 the Abbott Federal Government gave approval for massive coal port expansion in Queensland at Abbot Point and expansion of coal seam gas (CSG) facilities in Gladstone. It also approved the third coal mine to operate in the Galilee basin 450km from the coast. Environmental approval processes were also passed to the authority of State Governments to streamline further mining approvals, as well as Federal funding immediately cut to Environmental Defenders Offices in each state.

In the conclusion of the report on the risk of stranded assets, Ben Caldecott, James Tilbury and Yuge Ma state:

"It is clear that China’s coal demand patterns are changing as a result of environment-related factors and consequently less coal will be consumed than is currently expected by many owners and operators of coal assets. Given China’s growing role as the price setter in global and regional coal markets; falling demand will, all things being equal, reduce coal prices. This would result in coal assets under development becoming stranded, or operating mines only covering their marginal costs and subsequently failing to provide a sufficient return on investment."