Environmental

New Zealand Super fund facing possible fossil fuel divestment legislation

Opposition Green Party tables bill that could affect all public funds in the country

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New Zealand Parliament building

The NZ$29.6bn (€17.5bn) New Zealand Superannuation Fund is the latest major public pension plan to face potential fossil fuel divestment legislation with a new bill calling on it and other NZ public funds to exit fossil fuels.

Opposition Green Party MP Russel Norman has tabled the Climate Change (Divestment from Fossil Fuels) Bill that directs the managers of public funds like NZ Super, the Accident Compensation Corporation Fund and others, to divest from companies directly involved in the exploration, mining, and production of fossil fuels.

The draft bill also says investment managers should consider climate change risks of holdings.

“Fossil fuel companies are losing value left, right, and centre, so it makes economic sense as well as environmental sense to pull government investments out of fossil fuels,” Norman said.

NZ Super declined to comment to Responsible Investor. The fund, which is currently working to develop a climate change strategy, was a participant in this year’s Mercer’s ‘Investing in a Time of Climate Change’ and theconsultant’s modeling will likely inform its approach to climate change risk. It is also a big supporter of clean tech. Last month it made a US$75m investment in a high-tech glass firm – getting a seat on the board in the process. And last year it backed innovative waste-to-energy firm LanzaTech with a US$60m equity investment. It’s also a backer of firms such as battery tech outfit Bloom Energy and innovative wind turbine group Ogin.

But the Green Party says that analysis from the Parliamentary Library shows that NZ Super has increased the value of its investments in the world’s twenty dirtiest coal companies from NZ$29m at June 30, 2011 to NZ$36m at June 30, 2014 (as ranked by Carbon Underground 200). Over this time, the average (unweighted) stock price of these companies has declined by 31%.

Norman’s bill, a members’ bill chosen by ballot that is similar to earlier failed bills, is unlikely to be heard this year. Link