We’re winning on fossil fuel divestment

The climate movement took a big step forward this week when our largest council voted to divest from fossil fuel investments.

Auckland Council has now joined Dunedin, Melbourne, San Francisco, Washington DC, Copenhagen, and a host of other cities who have moved to dump their climate destroying investments. The Council’s $320 million fund will not invest in fossil fuel companies and will divest its estimated $15 million invested in big oil companies like ExxonMobil and Anadarko. The campaign was led by 350 Aotearoa who, though vision, tenacity, and sound research, achieved an important win.

I gave evidence to the Council before the vote and argued that divestment was on the right side of history. Not only was divestment the right thing to do ethically, it would protect the long term wealth of ratepayers. You can read my speech below.

This is a great step forward and now that our largest council has moved, I hope other councils will follow along with our Government funds like the New Zealand Super Fund. They still invest up to $676 million in some the world’s dirtiest fossil fuel companies.

Gareth

 

Kia ora

One of the world’s best performing sovereign wealth funds, our own, the NZ Super Fund has found that, “Responsible investors must have concern for environmental, social and governance factors because they are material to long-term returns.”

It’s good to join you today as you discuss divesting from companies involved in the manufacture or development of controversial weapons, tobacco, fossil fuels, and generating revenue from the operation of gambling machines. You’re joining a rapidly growing list of funds, banks, cities, universities, and churches that have divested from fossil fuels for ethical and financial reasons.

It’s the right side of ethics, on the right side of history, and on the right side of the balance book.

I’m the Green Party spokesperson for Energy and Resources and I want to speak about divesting from fossil fuels.

I think it’s fantastic you are revising your Responsible Investment Policy. After questions around tobacco investments and controversial weapons, you can now categorically state after pulling out of the Janus fund, there’s no investment in cluster bombs, nuclear weapons or other prohibited munitions. However, you can’t say that about fossil fuels and an estimated $15 has been invested in oil companies such as ExxonMobil and Anadarko.  

Fossil fuels have well and truly joined that international list of investments to avoid. You wouldn’t invest in slavery, nuclear weapons, or whale meat, and shouldn’t invest in a product that according to scientists is killing people right now.

There’s a blunt truth: There is no future if the fossil fuel industry has a future.

We can’t afford to burn 70-90% of the fossil fuels we’ve already discovered to avoid runaway catastrophe and meet our international obligations – let alone funding more.

Auckland could be called the capital of the Pacific. It has the largest population of Pacific people of any city in the world – the city has a responsibility to those nations on the frontlines of the effects of climate change.

The answer is to pass this revised Responsible Investment Policy and divest from the production of fossil fuels. This really is just another expression of your existing commitments in the Auckland 2040 plan, Low Carbon Auckland, and the C40 Cities Climate Leadership group.

Getting out of fossil fuels is not only the right thing to do, it makes financial sense too.

It protects Aucklanders’ investments against the risks of stranded assets where we know some if not most fossil fuels will have to stay in the ground, wiping much of the current value of the fossil fuel sector.

It also will be perform better financially. Your independent consultants report makes that clear and I’d just add a quote from our own Super Fund where they say, “Overall, there is strong evidence that companies that do well on ESG metrics tend to perform better. More specifically, companies with strong ESG or Corporate Social Responsibility (CSR) ratings tend to have some or all of the following features: A lower cost of equity and cheaper borrowing costs; Better corporate performance, for example higher profitability; and Better market performance, for example a higher stock price than less well-rated companies. The strength of the evidence is now quite compelling.”

I don’t think there’s any compelling argument against the new RIP.

I love the idea that Auckland, can join cities like Dunedin, Washington, D.C., and Copenhagen in becoming fossil free. I’m proud that ratepayers can know the $320 million isn’t harming our neighbours or contributing to the most severe environmental crisis we face. I’m excited to think that investment could be going to productive companies, smart technology, or investing in clean energy, making our city and world cleaner, richer, and more sustainable.

I urge you to support the proposal.