ESG Update as at 26 November 2019
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Australian and New Zealand ESG Updates
NZ government putting pressure on ACC for not doing enough about climate change
The New Zealand government, via a Parliamentary Committee, may force the Accident Compensation Corporation (ACC) - the largest institutional investor in the country - to divest a billion New Zealand dollars in fossil fuel-related investments.
The Education and Workforce Committee recently reviewed the ACC’s ethical investment policies, saying the fund is obliged to use its huge market power and influence to do more about climate change. It is within the government’s power to direct ACC under the Crown Entities Act 2019.
“At present, the decision about divestment from fossil fuels presently rests with the ACC Board to take into account all of the above, and our ‘reputation as a responsible member of the world community’,” the committee report says.
“Given Cabinet Ministers and the Prime Minister herself have all stated with regards to climate action, and particularly the Zero Carbon Bill that New Zealand’s role is to lead, it would make sense that we also lead the world in the next phase of divestment and ‘decarbonisation’.
Vison Super files resolution calling for BHP to suspend those not backing Paris agreement
At the BHP Australian annual general meeting recently a shareholder resolution was co-filed by Vision Super. The resolution had the support of investors worth $12.3 trillion as a group, with the support of almost a third of shareholders.
The resolution calls for BHP to suspend the membership of industry associations, such as the Minerals Council of Australia, with inconsistent advocacy of the Paris agreement to limit climate change to 1.5C above pre-industrial levels. An identical resolution was filed at the BHP Group AGM in London with a similar result.
BHP helps fund industry associations that lobby against sensible climate policy. The resolution hopes to suspend these memberships as a strong signal that pro-coal lobbying has seen its heyday and needs to stop.
Ausbil IM first Australian company to sign Investor Declaration on Plastic Pollution
Ausbil Investment Management is the first Australian company diving into the Investor Declaration on Plastic Pollution with a pledge to find solutions to our massive plastics problem via corporate commitments, programs and policies.
Måns Carlsson-Sweeny, the head of ESG research at Ausbil, said: “This is an active engagement approach with the major users of plastic to help increase the use of sustainable materials and reduce the reliance on plastics that end up in the environment and our waterways.”
Ausbil has published a paper.
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Global ESG Updates
EU finance ministers want stop to funding of oil, gas and coal projects with EU money
European Union finance ministers have made a joint statement saying the EU should phase out its funding of oil, gas and coal projects. This is the first time such a statement has been made, with previous statements only calling for an end to funding for coal power plants.
The EU’s financial arm, the European Investment Bank (EIB) is currently involved in multi-billion-euro financing of fossil fuel projects. In 2018 the EIB funded about two billion euros in fossil fuel projects. Hungary has pushed for a waiver, while gas projects in Ukraine, Croatia and other parts of the EU may be forced to rely on Russia for funding.
This declaration requires back-up by a formal decision by the EIB Board, which is comprised of representatives of 28 EU states.
