Weighing ANU's coal play

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Coal fired power plant

When the Australian National University sold its shares in a number of coal companies it received a mixed response. It won considerable support for the University from the public and a stern dressing down from Government and business. Such strong and disparate reactions to a relatively minor commercial transaction show that it scraped tender political and ethical nerves. 

The divestment was criticised on the general grounds that such decisions, particularly by public bodies, must be guided only by financial considerations, and on the specific grounds that the ANU divestment and naming of the companies involved were unjustifiable. 

The principle that investment and divestment should be guided only by financial considerations is an arbitrary dogma. Investing, like other financial decisions, is done by human beings, who should be guided by their effects of their investment on other human beings, not simply by the profit it brings them. This is true whether the investment made is by individuals or corporate bodies like universities and churches. 

Some critics of the ANU decision argued that in financial decisions universities should be guided by the policies of their major funding source, the Government. This is a dangerous dogma. Since universities inherit a collegial rather than corporate tradition, it is appropriate for them to attend to the views of their students and teachers, to seek advice from its scholars on the effect of coal on the environment, and to act on the advice they receive. 

Critics also argued that by naming the companies from which it withdrew investment the ANU unjustly caused damage to their reputation. Although the University examined each case, I remain uneasy about the naming of companies. The ethical point at stake has to do with the effects of fossil fuels as such, not with the guilt of companies involved in its mining. Scapegoating blurs this point.

The most substantial argument made against divestment is that coal mining provides revenue which benefits all Australians, and in particular provides employment for workers and for those who provide services. Coal mining also provides benefits to the poor in importing nations by enabling the industrial development necessary to feed and employ their people. It is reckless for an Australian university to prejudice these benefits. 

Universities, however, have larger responsibilities. Their work it is to build on the wisdom they receive and to pass it on to the next generation. So they ought consider the effects of current industrial practices on the flourishing of human beings for the future. They are also defined by world-wide relationships between scholars, and so are right to examine the effects of the coal that Australia mines on the world. Not to do these things would be a neglect of their responsibility.

It is also important, of course, for the university to consider the effect on people in Australia and abroad of ceasing to mine and burn coal. It must visualise and promote a staged process by which the welfare of national communities, and especially of people who are most vulnerable, would be assured. That kind of attention is an essential accompaniment of divestment. 

The deepest reason why the ANU divestment has attracted such bitter opposition lies in the judgment on which the decision is based: that global warming is real, that its consequences will be devastating, and that the burning of fossil fuels contributes significantly to it. The critics generally believe these judgments wrong. But even if the critics were to turn out to be correct, the University will have acted responsibly if it considers the evidence, accepts the judgment of an overwhelming majority of informed scientists on the matter, including those at the University, and acts upon it. 

The final argument against the action of the university is that it is ineffective grandstanding and so a waste of resources. The university should have put its energies into engaging with the coal industry, used its shareholdings to educate the companies at general meetings, or focused its attention on developing alternative sources of energy.

It would certainly be appropriate for the university to follow all these courses of action. But the reason why critics have attacked the ANU so fiercely is that they fear the divestment will be effective. It draws public attention both to the seriousness of climate change and to the risks of investing in the fossil fuel industry. Governments and businesses focused on short term profits are vulnerable to such changes of sentiment about the environment as those seen recently in the United States and in China. So divestment may well be very effective in influencing business decisions. 

The ANU decision to divest from coal should certainly encourage other public bodies and churches to examine their investment portfolios, consider their responsibilities, and weigh how best to discharge them.


Andrew HamiltonAndrew Hamilton is consulting editor of Eureka Street.

Coal power plant image by Shutterstock.

Topic tags: Andrew Hamilton, investment, ANU, coal, divestment, business ethics

 

 

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I wonder how the A.N.U. explains its global-warming based divestment decision to its 18 year old first year intake, who have never experienced global warming their whole lives, despite rapidly rising CO2 levels. See also today's peer reviewed report that only 36 percent of geoscientists and engineers believe there's an anthropogenic global warming crisis. The consensus is crumbling on a week to week basis.
HH | 29 October 2014


If only the University of New South Wales had the same moral compass as ANU when faced with the same dilema...
Angela | 30 October 2014


Thank you for the 'pros and cons" and their common sense. I wholly supported the ANU divestment...enlarged by other such moves, my grandchildren and children globally may face a less fearful world.
Caroline Storm | 30 October 2014


The essential moral issue underlying Dr Hamilton's essay lies in St Ignatius's question: "What doth it profit a man if he gains the whole world yet suffers the loss of his own soul?" The truth is that, contrary to the claims of many of its critics the decision by the Council of the ANU was not made hastily or capriciously: it was, as I understand (and would certainly have expected) made after the collection of much information and data and much thought about it. And why should the university not make public its actions, and its reasons (including the identity of its relinquished investments). The investments which it has are a matter of public record; how could one justify trying to keep secret what is disposes of? For years, some universities have refused to invest, for instance, in tobacco companies. Surely we'd regard that as an ethically meritorious action? Likewise, making the fact known could be seen as ethical leadership. So why not accept a similar decision about companies associated with coal -- given that in the past 50 years the concentration of carbon dioxide in our atmosphere has risen so alarmingly? Investments are made for many reasons: we should applaud when ethics and morality play a role in financial decisions. The "market" is certainly not something without a moral dimension.
Dr John Carmody | 30 October 2014


No one can deny the ANU, or any investor for that matter, the right to make a judgement call on the morality of supporting a certain industry. But coal is unique, as it has played such a significant role in pulling billions of people out of poverty. I believe it is more immoral to deny billions more the chance to have access to the many benefits we enjoy than it is to risk a little more harm to the planet. We can sit back smugly enjoying the benefits cheap energy has brought us, while selfishly denying those same benefits to a great many people. For many of those people, climate change is not the threat. The threat is hunger, disease, poverty and hopelessness. If the world is being threatened, it's our world not theirs. It’s our future we are trying to protect while robbing them of theirs. The world is gradually moving away from the use of fossil fuels, but it has to do it at a pace that benefits all humanity.
Tony Burnell | 30 October 2014


Ethics, like Religion, should be built on informed and indisputable science. A.H. "..the judgment of an overwhelming majority of informed scientists on the matter." H.H."only 36 percent of geoscientists and engineers believe there's an anthropogenic global warming crisis." Which is Fact and which is Spin? Critics of considered moves by responsible bodies should be asked to declare their interests, whether financial or affiliation with political parties who promote such agendas. Personally I have no such affiliations.
Robert Liddy | 30 October 2014


Investment decisions should be guided by the effect not only on humans but also on the whole Earth Community, including the multiple other species on the planet. Humans are not the only living beings with rights. Nature has rights by virtue of its existence.
John Gherardi | 30 October 2014


Thank you for this article. I agree in general, except to point out one important flaw. ANU has not divested from any coal companies. They are divesting Santos, Oil Search, and a bunch of other miners that aren't in fossil fuels. There's a very large chance the capital they will take out will go back into the sector.
Tom Swann | 30 October 2014


What has happened to the United Nations Global Contract? My local shire council has adopted a triple bottom line approach to its Annual Financial Report - money, environment and social. If only more shires and corporations would adopt a similar approach. At least it would make them look at the environmental and social impacts of their business behaviour. Whether or not we could believe their evaluations is another thing. ANU may have carried transparency too far in naming names but it is headed in the right direction. I would expect nothing less to The Gown when dealing with The Big End Of Town.
Uncle Pat | 30 October 2014


HH, whether global warming is anthropogenic or not is not the most important question. The related question of whether we (humanity) can do anything to mitigate it is more important.
Gavan Breen | 30 October 2014


Really, thanks for this ...I think I will memorize it so I can participate sensibly in the arguments.....
Eileen Grichting | 31 October 2014


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