The Australia Institute is a progressive think tank that produces credible, fact based economic reports on the issues facing Australia. What I have copied here is a short article from their periodic email on recent decisions by the ANU and others to divest the shares they held of companies whose business and/or behaviour is unacceptable on social, environmental etc. grounds.
It is just part of the pressure being encouraged by organizations such as 350.org to encourage banks, super funds etc. to stop investing in and financing unethical activities such as extracting fossil fuels:
Divestment movement hits a nerve
The fossil fuel divestment movement seemed to hit a particularly sensitive nerve this week. The Australian Financial Review has published a litany of critical front page stories, editorial and opinion pieces. In particular, special outrage flowed over divestment decisions taken by the Australian National University (ANU).
ANU announced last week it would divest from seven resources companies on environmental, social and governance (ESG) grounds. ANU is home to a long running student campaign calling on them to divest from fossil fuels. Under pressure, ANU sought professional ESG research and declared it would knock out the companies that ranked worst. The companies impacted include gas giant Santos, Oil Search and other miners extracting copper, nickel and a range of other minerals.
ANU’s decision has drawn ire, not only from the companies themselves, but also from SA Premier Jay Weatherall, previous Resources and Energy Minister Gary Gray and some Indigenous groups. There have been all manner of complaints: the companies say they weren’t consulted; they have won ESG awards; Santos is a proud Australian “pioneer”; fossil fuels cure poverty “whatever the effects of carbon dioxide emissions on climate”; mining is essential to modern life, and so on. One company is talking about legal action.
Others have baulked at the unusual enthusiasm in the reactions and coverage. A Canberra Times editorial said it “verged on hysterical”. Clean energy commentator Giles Parkinson, himself an ex-AFR deputy editor, said the reaction was “as though someone had committed treason against Team Australia. Or at the very least against Team Coal.”
At first glance, coal has nothing to do with it. ANU is not divesting from coal companies – unlike Stanford, which is divesting from all big coal companies, and Glasgow University which this week said it would divest from fossil fuels. Indeed, without a sector wide screen, ANU is likely to reinvest in fossil fuels. But when ABC’s Lateline covered ANU’s decision this week, theMinerals Council sent the head of their Coal Division into bat for the miners. Maybe that’s because coal is most at risk from the reputational effects of divestment campaigns. Coal is the heaviest emitter, cheapest to substitute with renewables and at most risk of being displaced by new clean energy.
ANU Vice Chancellor Prof. Ian Young defended the ANU’s move:
as “a major researcher in environment and alternative energy, we need to be able to put our hand on our heart when we talk to our students and to our alumni and to our researchers and be able to say that we’re confident that the sort of companies that we’re investing in are consistent with the broad themes that drive this university.”
ANU economist Warrick McKibbIn did not agree, saying “you need proper, clear, transparent policies such as carbon pricing… You don’t get the sort of adjustment we need by these token gestures by institutions like a university.”
But Swiss investment bank UBS endorsed the strategy in a recent investor note. UBS said this was a “potentially effective campaign”, noting that:
“many of those engaged in the debate are the consumers, voters and leaders of the next several decades. In our view, this single fact carries more weight than any other data point on the planet for this issue: time, youthful energy and stamina are on the side of the fossil fuel divestment campaign.”