Protest against fossil fuel companies

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.