Nigel Roberts

This week the Yell team attended ‘Divestment & The Unburnable Carbon Dilemma’ event, organised by the Greenups. The speakers included Simon O’Connor, CEO of the Responsible Investment Association Australia, Michael Salvatico – Vice President of MSCI ESG, ex National Director of GetUp and the founder of Future Super.

All three speakers told a great story of the real opportunities for Australians to make an active choice to invest in fossil-free funds. This fossil-free ethos was the foundation of each of the presentations, which were all passionate, informative and inspirational.

The speakers urged us all to vote with our money, by withdrawing investment in unethical funds, or by actively contacting the firms in which our funds own shares. It’s a fine line as to how we can influence our super fund managers, but we were all urged to make a choice.

They also made compelling cases for some of Australia’s resources companies having a finite life, based on the unburnable carbon concept. This concept posits that if we are to meet global emissions targets and keep CO2 levels at 2% or under (the internationally agreed but not legislated figure), then a large percentage of the resource firms’ fossil fuels will have to remain unburned. Essentially it means their share value is based on a potential income that should not be realised.

Whether the broader market agrees on this remains to be seen (clearly it doesn’t and won’t until the 2% figure is legislated). Additionally all three speakers acknowledged that the commodities firms do have some diverse revenue sources, including large investments in renewable energy, but that their underlying value was in question.

This led to the view that we are all left with a choice to actively invest in fossil-free funds, which shouldn’t necessarily impact on returns, which are comparable to the market, despite their reputation.

The question that I came away with was why don’t Australians know more about the opportunity to invest in sustainable funds? Where’s the effective marketing of these funds? I’m a socially and ethically aware consumer, with a history of working with and marketing socially responsible investing, but my awareness of available funds in Australia is low.

It seems that there’s a massive opportunity to grow awareness, engagement and investment in ethical funds. With increased scale, we may see decreased costs, one of the issues with these specialist funds.

It’s also a great story for financial services, not exactly littered with good news at the moment. While they’re well behind their US and European peers, Australian fund managers are embracing an ethical stance with 8 of the big 10 fund managers now committing to offering ethical funds, of which few general investors would be aware.

Maybe the situation will change, with Sheikh’s new fossil-free Future Super fund about to launch, as he’s a man who knows how to make some noise. We hope so, it’s a positive story, a great opportunity for us to make a difference and to truly invest in our futures.

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