Principles for Responsible Investment (PRI) Managing Director Fiona Reynolds has slammed the Australian government’s plan to discourage Australia National University (ANU) from divesting from seven fossil fuel companies as “dangerous”.
Last week, ANU announced it was divesting A$16m shares – or 5.1% of its Australian equity holdings – in seven fossil fuel companies including Newcrest Mining, Iluka Resources, Oil Search and Santos.
The review, commissioned by the university as part of its Socially Responsible Investment Policy, was carried out by CAER, the Australian ESG research house.
Yesterday, Federal Infrastructure Minister Jamie Briggs was quoted in the Australian Financial Review saying the move by ANU was a threat to jobs.
Briggs said he would write to ask ANU vice-chancellor Ian Young “for an explanation and to reconsider” the decision. “To publicly denigrate the reputation of one of South Australia’s finest companies is a disgrace,” he said.
“This seems to be taking green activism to a new level where it is damaging Australian companies and potentially job creation in the country.”
Reynolds reacted on Twitter, saying: “Since when it has been government’s role to tell investors how to invest?”
Speaking to Responsible Investor, Reynolds said that it was a “dangerous thing for government to start trying to determine where non-government money is or isn’t invested”. She said it was part of a recent trend in the Australian press of negativity around responsible investment as an increasing number of domestic investors take stock of climate issues.She said ANU had decided to divest, while others were looking at their carbon footprints or deciding not to invest in new projects involving fossil fuels.
Last month, for example, RI reported that Hesta, the A$29bn super fund for health and community services was restricting new investments in thermal coal companies.
Reynolds said the lobbying group for the coal industry had been attacking responsible investment as a result.
Brendon Pearson, Chief Executive of the Minerals Council of Australia, wrote a column in the Australian Financial Review in which he criticized divesting from coal, arguing that beneficiaries will end up with reduced retirement savings. Coal, according to the Minerals Council of Australia, delivers electricity to the poor and should itself be seen as an ethical investment.
Reynolds said: “Government’s role is to set the context in which investors operate. They create the regulatory framework and it is up to individual investors with their own boards and their own investment beliefs to make decisions about where they do and don’t invest.”
Meanwhile, the seven fossil fuel companies which ANU has divested from are considering a collective response to the decision, according to Independence Group, one of the companies ANU ditched.
“All the companies mentioned are groups that are primarily focused on operations in Australia, are conducting their business to a very high standard, and it is just very strange to see this sort of attitude from an Australian investor when there is potentially a lot of other low-hanging fruit out there that they could target,” Independence Managing Director Peter Bradford said.