ANU acknowledges fossil fuel industry is a risky investment

Friday, 1 April 2016

Today Luke Kemp, on behalf of Fossil Free ANU, presented to ANU Council with a Staff Open Letter of over 450 signatures in support of divestment from the fossil fuel industry.

In response, ANU Vice Chancellor Brian Schmidt outlined how the ANU was managing the risk associated with investing in the fossil fuel industry, and how it has taken action to limit carbon exposure.

Schmidt announced that the ANU would ‘weight the portfolio to reduce carbon intensity… to ensure that it is at least 25 per cent lower than the ASX 200’

Schmidt stated: This was done to more efficiently decrease the University’s investment exposure to CO2 intensive industries without increasing the University’s exposure to volatility in the equities market.

The University will continue to evaluate the methods available to simultaneously meet its obligations to achieve a high and stable return on its investment portfolio and decrease its CO2 intensity’.

Fossil Free Spokesperson, Luke Kemp, welcomed the move but stressed that, “as with the ANU’s partial divestment in 2014, it is not enough.”

Kemp said: ‘The ANU’s move to decrease the carbon intensity of their investments is a welcome, positive step forward. It demonstrates that the ANU clearly recognises carbon exposure, and the risks of investing in fossil fuel companies. This sends a signal to other universities about the importance of considering the financial risk of investing in a carbon bubble.’

‘However, there is  a world of difference between minimising risk and showing leadership. Climate change is a moral issue that requires urgent, decisive action. By not fully divesting, the ANU today missed an opportunity to show true climate leadership. We implore ANU to fully divest urgently, as we cannot wait any longer.’

In their presentation, Fossil Free ANU announced that if the ANU does not take leadership on climate change then they will be forced to take further leadership themselves.

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Staff Open Letter

Fossil Free ANU has created a staff open letter. If you are an ANU staff member, you can sign at http://act.350.org/signup/ffanu-open-letter-2/.

“We write to urge you to adopt a critical change to the ANU’s investment policies.

In 2014, the ANU made national and international media when it made the decision to divest from seven socially irresponsible mining companies, including two fossil fuel companies. The University stood by its decision despite unprecedented backlash from the Prime Minister and other federal ministers, the Australian Financial Review, and the mining industry. We commend the University for taking this important first step towards fossil fuel divestment.

Yet, ANU still invests over $45 million in fossil fuel companies. To be a true climate leader, ANU needs to finish the work that it started, and divest the rest of its fossil fuel investments.

The Paris Agreement indicates the world is taking action to transition to a low carbon economy. As a global leader in research and education, the ANU has an obligation to lead global efforts to secure a safe climate for future generations.

Vice-Chancellor Brian Schmidt has said that to keep warming below two degrees, “citizens of the world need to demand it.” As citizens of this university, we demand the ANU take leadership on this issue. This includes fully breaking ties with the fossil fuel industry  – the ANU must divest the rest.

In light of this, we, the undersigned, call on the University to:

  1. Investigate and disclose ANU’s investments in companies that explore, extract, process and transport fossil fuels;
  2. Cease any new investments in these fossil fuel companies;
  3. End ANU’s investments in fossil fuel companies within 5 years under a planned divestment regime, with ongoing transparency.

We hope the ANU will take action with the urgency climate change demands.

Yours sincerely,

………..”

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Letter to ANU Council

Dear ANU Council,

Students for a Fossil Free ANU is writing to inform you that our campaign for leadership on fossil fuel investments continues this year, and to request that you place this issue back on Council’s agenda. Specifically, we request that the topic of the fossil fuel divestment is placed onto the agenda and discussed at the Council Meeting on April 1st 2016. At this meeting, we urge the ANU to commit to full fossil fuel divestment.

We first note the progress made so far, before outlining our reasons for taking further action.

Progress So Far

We commend ANU on its progress so far on fossil fuel divestment – ANU has a socially responsible investment policy, has divested from three fossil fuel companies as part of a broader ethical investment decision, and has recently introduced a carbon ‘tilt’ to reduce the carbon intensity of ANU’s domestic equities by 25% as compared to the ASX200.

ANU’s 2014 partial divestment lead to disproportionate controversy, yet the University stood strong with the community behind them. This support is confirmed by national polling and polling of ANU staff completed by ANU students. The ANU community wants ANU to be a leader. As former Vice Chancellor Ian Young noted, ANU’s decision to divest turned out to be an act of national leadership.

The Need for Full Divestment

Since that 2014 decision, the divestment movement has since grown substantially. The Australian recently listed the divestment movement as 20th most influential force in Higher Education, foreshadowing the coming divestment “tsunami” in the wake of the Paris Agreement.1 Asset managers holding $3.4 trillion have now made some form of divestment2 and AXA predicts continued growth this year.

In this context, it is remarkable how little action we have seen from Australia’s universities. ANU and the University of Sydney have both made modest divestment and carbon reduction pledges, while Swinburne is considering divestment but is yet to take any action.

We support ANU’s right to make such a decision and support these first steps towards responsible investing, but we continue to have concerns about the process, transparency and scope of the 2014 divestment decision and carbon tilt announcement. While the level of attention suited our goals, we doubt the episode would have attracted such criticism had the matter been approached differently. In particular, the 2014 decision was not framed specifically to take climate leadership, and did not intend to single out the fossil fuel industry, despite being interpreted as such. We note the contrasting reaction to the August 2015 decision of the ACT Government to divest, which was relatively uncontroversial and indicates wide acceptance of divestment within the ACT community.

Owing to the media attention ANU received in 2014, many people already believe ANU has divested from fossil fuels. Such individuals are deeply disappointed to learn that the reality is that ANU continues to invest in companies holding some of the largest carbon reserves in the world. ANU can only be a true climate leader if we fully divest from fossil fuels.

The University acknowledges that 2014’s divestment decision saved them millions of dollars, just as ANU’s earlier divestment from Metgasco also saved ANU millions of dollars. One recent study found that if the ANU had divested from fossil fuels in full when initially asked, it would be more than US$50 million ahead of its current position.3 With this knowledge, ANU can no longer claim to be fulfilling its fiduciary duty without fully divesting from fossil fuels.

We hope that Council recognises the moral and financial sense of divesting, and makes ANU the first Australian university to be a true climate leader.

 

In anticipation,

Fossil Free ANU

 

1 The Australian, 2015. http://www.theaustralian.com.au/news/special-features/higher-education-30-most-influential-2016/news-story/32518529239a8924d6da4f29919ca349
2 Nussbaum, 2015. Bloomberg, http://www.bloomberg.com/news/articles/2015-12-02/fossil-fuel-divestment-tops-3-4-trillion-mark-activists-say
3Heaps, 2015. Corporate Knights, http://www.corporateknights.com/channels/responsible-investing/fossil-fuel-investments-cost-major-funds-billions-14476536/

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ANU partial fossil fuel divestment had “significant positive financial impact”

November 17th, Canberra

Partially divesting ANU’s portfolio from fossil fuels has already had a positive financial impact, according to Chris Grange, Executive Director of the ANU.

At a Budget Forum on November 13th Mr Grange, whose role includes coordinating the overall University budget, happily acknowledged that the partial divestment saved them millions.

“The decision to divest had a significant positive financial impact due largely to the major drops in the share prices of the seven companies from which we divested, post our divestment decision,” Mr Grange said.

“The University is currently reconfiguring our Australian equities portfolio and we are introducing a tilt that is aimed to reduce the carbon footprint of our share portfolio.”

This tilt on its Australian equities portfolio will reduce its carbon intensity by 25% compared to the ASX200.

“For Mr Grange to say that is a huge win for us; it’s a really good outcome,” said Fossil Free ANU spokeswoman Miriam Adams-Schimminger. “Fossil fuels are increasingly becoming stranded assets and bad investments, and we’ve been saying that all along. It is great that the University is seeing it too.”

However, new research has determined that ANU has lost over $53m in the past three years due to their continued investments in fossil fuels.

Carried out by Coperate Knights, South Pole, and 350.org, the analysis shows that  global investors lost billions of dollars over the past three years by remaining invested in fossil fuel companies.

“We’re not surprised by this finding. All the evidence says that investing in fossil fuels is not only bad for the climate, but that it’s bad for returns,” Ms Adams-Schimminger said. “Fully divesting from fossil fuels is really in ANU’s best interest, both financially and as a world leading university.”

In October last year ANU divested from two fossil fuel companies and five resource companies as part of its Socially Responsible Investment policy. The decision was widely supported by the ANU community but sparked a media furor that drew the ire of commentators and Cabinet Ministers.

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New ANU VC must turn energy vision into investment leadership – Press Release

Appointment of Brian Schmidt as the new ANU Vice-Chancellor is an opportunity for ANU to show real leadership on Australia’s move away from fossil fuels, say students behind the campaign to divest the rest of ANU’s fossil fuel investments.

Claire Gardner, spokesperson for Fossil Free ANU, said “Brian Schmidt understands how serious the carbon problem is getting, for the planet and for Australia’s economic future. He sees Australia’s future is in clean energy.” [Quotes below]

“If ANU is going to lead Australia through these debates, Brian must get ready to take a principled stand on these issues at the ANU. That includes our fossil fuel investments.”

“How can ANU lead the energy transition when it stays invested in the industries trying to hold us in the past?”

Last year the ANU divested from two fossil fuel companies, but held on to major oil and coal producers. The global divestment movement is growing rapidly – Oxford, Stanford, Edinburgh have all divested coal, along with around 30 other unis. MIT may soon join them.

“To be an elite university, ANU must take a principled stand on fossil fuels, or risk getting left behind.”

“We congratulate Brian Schmidt on his new position. It is great to see a leader appointed from within the ANU community. That community will expect Mr Schmidt to take further steps towards making ANU a leading university on this issue.”

“Schmidt says that keeping global warming below 2 degrees means “citizens of the world need to demand it”. Citizens of his own university will continue to call for leadership until ANU has divested from the fossil fuels that are causing this warming and holding back the transition. Fossil Free ANU gladly welcomes any dialogue with Mr Schmidt about how the university may best lead Australia towards a clean energy and safe climate future.”

QUOTES FROM BRIAN SCHMIDT’S RECENT PIECE IN FAIRFAX

“Climate change is…the great challenge for humanity over the next 100 years”.

“I see this as an issue where the beginnings of the problems will come towards the end of my life. … As for my grandkids, who don’t exist yet, I really do fear for them and humanity if we don’t tackle this.”

“Yes we do have large reservoirs of coal, which are probably not going to be able to be used. I fully expect that the demand for Australia’s coal reserves will drop off dramatically in the next 20 years.”

“Australians should be looking to help secure our own future. … If you look at our strategic advantage, one might argue we have even more advantages in a renewable energy economy than in a fossil fuel one.”

 

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PRESS RELEASE

Thousands of ANU Students Call on the Vice-Chancellor to “Divest the Rest” 

Canberra, 22 April 2015

ANU students today launch a campaign to “Divest the Rest” at ANU, presenting Vice-Chancellor Ian Young a 30 metre long petition, with the signatures of 1500 students calling for leadership.

Despite the widespread media attention that the ANU and its Vice-Chancellor Ian Young received following the decision to divest from seven resource companies, in reality it dumped only two fossil fuel companies and held on to some of the most carbon heavy stocks.

The campaign launch comes the day after a report headed by Australian National University Associate Professor Frank Jotzo said that switching investments away from fossil fuels is a key part of transitioning to a renewable economy and cutting Australia’s carbon emissions.

This action is part of 350.org Australia’s National Day of Campus Divestment Action, and  comes after the university announced that it would sell $16 million worth of shares in seven resource companies in late last year. Yet Fossil Free ANU says the ANU has only made a tiny step and needs to go further.

“ANU has built its image of leadership on climate change by divesting from merely two companies,” said Fossil Free ANU spokesperson Miriam Adams-Schimminger. “We have lauded the ANU for taking the first step, for standing up to its critics, including the Federal Government. But now, if we are to live up to our own rhetoric, we must go further and divest the rest.”

She  points out that the university is still in invested in numerous fossil fuel giants, including BHP Bilton and Westfarmers, and that the Fossil Free ANU campaign will not cease until the university is fully divested.

At a meeting with Vice Chancellor Ian Young they handed over 30 metre long petition of 1500 signatures urging him to divest the rest, a move they say will confirm the ANU’s position as a globally important university.

“With Professor Young announcing his departure from ANU to pursue climate research, it would only make sense for him to want to leave a legacy that distinguished ANU as a global leader in sustainability,” she said.

“The ANU prides itself on being a world leading research university, and we believe it should continue to lead by divesting the rest of its investments in fossil fuels.”

“It’s time for Australian Universities to put their money where their mouth is and get the buck out of fossil fuels. Our Unis are clearly falling behind their global counterparts when it comes to climate leadership,” said 350.org Australia National Campus Divestment Coordinator, Vicky Fysh.

The divestment movement aims to take away the social and political licence of the fossil fuel industry and is being championed by faith groups, educational institutions, cities, and community groups across the world.

“For universities to continue to invest in fossil fuels is for them to directly undermine what they aim to provide their students and society – a future,” Ms Adams-Schimminger said.

Spokespeople Miriam Adams-Schimminger    Louis Klee Fossil Free ANU                     Fossil Free ANU 0403 264 359                          0435 084 253

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How will you vote?

Dear Friends,

By the end of the year, ANU Council has a choice to make. Are they ready to lead on climate change and stop investing in fossil fuels?

While Council deliberates, this week it’s time for ANU students to make their choice. In the first ANUSA referendum on record, the ballot paper will ask students this question:

“Should ANU stop investing in fossil fuels, such as coal and coal seam gas, which are the main causes of climate change and associated social injury?”

Join us by pledging to Vote YES!

  • WHAT: ANUSA fossil fuel referendum, part of the election
  • WHERE: Union Court
  • WHEN: This week, 10-4:30, Mon-Thurs 24-28 Aug
  • (Law School on Wednesday morning)

Whatever you think about student politics, in the referendum you can vote for something big: ANU’s leadership on your future and the future of this planet. What’s more, we have the support of every presidential candidate and their tickets.

Fling, Connect, Fetch and Student House Party — and BOB BROWN! – all say Vote YES!
Will you?

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