Fossil Fuel Divestment: Climate Proofing Your Finances

With the growing success of the divestment movement in the United States and concern over ‘stranded assets’ as the climate crisis exacerbates, the Balanced Enterprise Research Network (BERN) at the University of Sydney Business School, in association with 350.orgMarket Forces and the Australia Institute, hosted a panel discussion on Thursday 29th May exploring the potential for fossil free investment. You can view a video of the event below.

The panel included a range of experts from the ethical investment sector and NGOs leading the growing social movement around divesting from fossil fuels.

The MC for the evening, Julien Vincent, lead campaigner from Market Forces, oversaw the discussion and also outlined his recent successful trip to Europe where he was part of discussions with HSBC and Deutsche Bank over investment in the Abbot Point coal port expansion on the Great Barrier Reef. To spontaneous applause, Julien outlined how these financial giants have now committed not to finance this massive new fossil fuel development.

Tim Buckley, who is Director at the Institute for Energy Economics and Financial Analysis (IEEFA), then providing a fascinating talk on the declining financial outlook for the global coal industry, the limited role of gas as a ‘transition fuel’ (outside of the US), and the dramatic growth in renewable energy investment based on significant reductions in the cost of solar technology. Tim stressed that what is often missed in our domestic political discussion is that coal share prices have dramatically declined in the last few years due to over investment, weak global demand and over supply. He suggested that rather than a simple cyclical trend, this represents a more fundamental structural downturn. This makes fossil fuel investments increasingly risky medium to long-term investments (ignoring the environmental, and ethical implications of investing in industries which are destroying a habitable planet!).

Tom Swann from the Australia Institute then outlined a new report entitled Climate Proofing Your Finances: Making Your Money Fossil Free. Tom outlined the concept of ‘unburnable carbon’ and the practical steps individuals can take to act ethically in the management of their finances. This includes protecting your savings from the financial risk of future write downs in the value of fossil fuel companies, and also how you can become involved in engagement and advocacy in this area.

Our final speaker, Trevor Thomas, Managing Director  at Ethinvest, then provided some practical advice about the conversations we as individuals can have with superannuation funds. He began his talk by stressing how significant systemic change can occur through small, strategic interventions and stressed the need to ask some basic questions about where our money is invested, including:
– what is your current exposure to fossil fuel investment?
– are superannuation fund managers putting short term profit ahead of members’ long term financial interests? and
– requesting funds eliminate your exposure to fossil fuel investment or source alternative funds which are now guaranteeing responsible investment (see for example the recent announcement by AMP re their ethical investment fund).

The evening concluding with an extensive Q&A session where the disastrous implications of the current Federal government’s attempts to emasculate renewable energy investment were seen as placing Australia at significant financial and physical risk.

The energy and enthusiasm at last night’s event suggests the movement towards climate proofing investments is just beginning. Thanks to 350.org, the Australia Institute and Market Forces for an inspirational and very informative evening.

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