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Is your super doing dirty work?

  • 21 June 2016
You know the global fossil fuel divestment movement is having an impact when Catholic organisations make public their decisions to divest, as has happened on the anniversary of Pope Francis' encyclical, Laudato Si'.

Four Australian religious congregations made the first ever joint Catholic divestment announcemet on 16 June, marking the beginning of a new push by the Global Catholic Climate Movement for Catholic divestment.

An accelerating number of institutions and individuals are moving their money out of planet-heating fossil fuels and into climate solutions. The total assets guided by some form of divestment policy was $3.4 trillion at 2 December last year, 50 times more than what was up for divestment 12 months earlier.

It sounds like a lot of money, but it's a small amount compared to the $100 trillion-plus invested in the usual way. That's our money — yours and mine — in banks and super funds, managed funds and insurance companies.

Most funds managers follow the conventional investment wisdom and the professional practises which they see in other fund managers. Like the rest of us, they're reluctant to go against existing trends.

That's despite the fact that, whether your priority is ethics or maximising returns, the reasons to think outside the box are multiplying by the month. Let's start with ethics.

Ethical reasons to divest

Most of us know that burning coal, oil and gas is a major contributor to global warming, along with animal agriculture and forest clearing. It's also becoming appreciated that 80 per cent of fossil fuel reserves must stay in the ground if we are to avoid catastrophic climate disruption. Ethically, this knowledge changes everything. Climate-related extreme weather events and sea level rise are already hitting vulnerable communities, and coming generations will be left with an unthinkable future.

Ursula Rakova of the Carteret Islands organises the relocation of islanders from their atoll to Bougainville. In her speaking tour in April she said that her homeland is paradise, but they are being driven out by the salination of soils and fresh water sources. At first the islanders thought the 'spirits were angry' with them, but they now realise they are subject to forces created by others.

The urgency of the need to move away from fossil fuels has been championed by moral leaders such as Pope Francis in Laudato Si' and Archbishop Desmond Tutu. Faith-based institutions were prominent in the first wave of the fossil fuel divestment movement.

Funds managers of some faith-based institutions today