Bank accounts closed in fossil fuels protest
SMH,
2 May, 2014
The growing trend away from fossil fuel investments has taken a local twist, with hundreds of customers of Australia's four major banks said to be set to close their accounts in protest against funding of coal and gas projects in an action organisers say threaten up to $120 million in investment.
The
initiative, organised by activist investment group Market Forces and
climate campaigner 350.org, represents an extension of the fossil
fuel divestment movement that has taken hold in northern Europe and
threatens to remove major investors from the share registers of BHP
Billiton, Rio Tinto and other major Australian-listed companies.
While
the origins of the movement are rooted with ethical investors, it is
increasingly taking hold among mainstream investors, with Norway's
huge pension fund in the process of considering a fossil fuel
divestment strategy.
In
a further sign of the trend, London Stock Exchange-owned FTSE Group
and the world's largest fund manager BlackRock earlier this week
announced plans to launch an index that tracks the performance of
stocks specifically excluding those linked with fossil fuels.
Announcing
the initiative, FTSE chief executive Mark Makepeace pointed to
increasing demand from clients "for indices that reflect their
overall business culture and values."
The
FTSE Developed ex Fossil Fuels Index Series will exclude companies
with operations in exploration, ownership or extraction of fossil
fuels. The index series will exclude companies that investors in
exploration and production, oil and gas, and coal mining, and either
derives revenues from those activities or has proven reserves on
their books.
BlackRock
will meanwhile use seed capital from not-for-profit organisation
Natural Resources Defense Council to launch a "solution"
that tracks the index. It didn't give details.
Coal
and gas backfires on banks
The
two-day customer action at Westpac, ANZ, NAB and Commonwealth Bank of
Australia comes in protest at the combined $19 billion that the four
major banks are calculated to have loaned to new coal and gas
projects.
According
to the organisations that are promoting the initiative, hundreds of
customers sent letters a year ago to their banks putting them on
notice they would lose customers unless they committed to ruling out
future loans to coal and gas projects. They are now following through
on their intentions.
Market
Forces and 350.org say that over $80 billion has been loaned to coal,
oil and gas projects in Australia since January 2007.
An
ANZ spokesman said the bank recognised there would be a transition to
a lower carbon economy but said it needed to take place "in a
balanced way".
"Major
projects require federal and state government environmental
approvals. Any involvement from ANZ would depend on those approvals
being granted, as well as our own social and environmental policies
and standards being met," a spokesman said.
He
said ANZ has a stated policy to increase its project funding to
renewables, which currently represent 39 per cent of the bank's total
project finance funding for power plants, while coal accounts for 34
per cent.
Former
mining executive Ian Dunlop, an advocate for action on climate change
who stood unsuccessfully for a position on BHP Billiton's board last
year, said the grass-roots actions by consumers and mainstream
investors may finally start to push fossil fuel companies and their
lenders to fully consider the risks of further investment in
petroleum and coal.
"The
community is getting the sense that this actually is going to be a
very big issue," Mr Dunlop said.
"People
have been saying, 'Well what can we do?', and the fact that you can
actually address the major banks and ask them to change their
approach, then finally I think a lot of this activist stuff is
starting to have an impact."
In
the US, students at Harvard University on Thursday blockaded its
administrative offices as they sought to persuade the university's
$US33 billion endowment to sell its investments in fossil fuel
companies, the Financial Times reported.
The
campaign, which dates from 2011, has so far persuaded 11 universities
and other institutions to sell out of petroleum and coal companies
because of climate change concerns, the newspaper reported.
The
Divest Harvard initiative says the university has about $US17.3
million investment in the top 200 publicly traded fossil fuel
companies.
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