Version: 23 May 2017

Background on the divestment movement

Organisations such as have sprung up because of failures by governments to take sufficiently strong or urgent action on climate change.  A key strategy of has been to advocate fossil fuel divestment.  We are encouraging governments, superannuation funds, companies, foundations, religious groups, non-profit organisations and individuals to eliminate their investments in fossil fuels.  Our goal is to stigmatise fossil fuels as an unethical investment – unethical especially in the intergenerational sense, as the continued burning of such fuels will have dire consequences for the 4 million Australians that are currently under the age of 15.

Some people ask whether divestment will actually be effective, or whether it is merely symbolic.   It should be remembered that psychology plays an important role in economic outcomes – witness the importance attached to consumer and investor confidence.  A report by Oxford University has said that a divestment campaign can cause other investors to question the future cash flows and share values of the target companies, and that it is this indirect impact which is of most significance.

While the concept of divestment includes the choice of banking services by individuals and organisations, this position statement is concerned more with direct investment in fossil fuel companies through share holdings.

Recent divestment developments

The global divestment movement has gained significant traction in the past three years.  The Carbon Underground 2016 edition reported that the value of assets committed to divestment rose very sharply during 2015, to reach US$3.4 trillion,  This was driven in part by a large number of divestment commitments leading up to the Paris conference at the end of 2015.

A summary of divestment commitments can be found here.  Major divestment commitments include those from the Rockefeller Brothers Fund, the Norwegian Sovereign Wealth Fund, the University of Glasgow, the Guardian Media Group, the World Council of Churches, the City of Oslo, the Australian Capital Territory, the British Medical Association and the Leonardo DiCaprio Foundation.

In January 2017 the Irish Parliament voted to fully divest its sovereign wealth fund, worth over €8 billion, from coal, oil and gas.  (At the time of writing, the Fossil Fuel Divestment Bill had proceeded  to the Committee stage).

A list of Australian local government authorities that have committed to divest can be found here.

Here are some more examples of global divestment activity:

  • In June 2015 the Norwegian Parliament voted to order the country’s Pension Fund, the world’s largest sovereign wealth fund with assets of over A$1000 billion, to divest from all companies that generate more than 30% of their revenues from coal-related activities.
  • In March 2015 the Guardian Media Group announced that it will divest from fossil fuels, and wrote an opinion piece entitled The argument for divesting from fossil fuels is becoming overwhelming. It called on two major foundations, the Bill & Melinda Gates Foundation, and the Wellcome Trust, to do likewise.
  • In June 2015 the Royal Australasian College of Physicians announced that it will divest all companies “directly and materially involved in fossil fuel activities” from its $90 million investment portfolio. The College took this action in recognition of the threat to future health outcomes posed by climate change.
  • In June 2015 the multinational insurance and financial services company AXA, headquartered in France, announced that it would remove about A$400 million of coal investments from its portfolio, and would treble its investments in green technologies and services.
  • In June 2015 Sir Mark Moody-Stuart, former chairman of both Royal Dutch Shell and Anglo American PLC, said that divestment from fossil fuel companies is “a rational response to the distressing lack of progress on climate change”.

 The financial risks of not divesting

We draw attention to research (such as the Australia Institute report entitled Climate proofing your investments) showing that divestment from fossil fuels would not harm investment outcomes.

Far from being risky, divestment is now increasingly seen as a sound business strategy because of the increasing risk of “stranded assets”.  For example, in April 2014 a leading European broking house, Kepler Chevreux, issued a report which concluded that the global fossil fuel industry faces potential write-downs of over A$30 trillion over the next two decades if the world takes action to address climate change and moves to decarbonise the global energy system.

At a conference held in March 2015, the Bank of England expressed concern about significant risks of stranded assets in fossil fuel investments.  A similar warning came from HSBC, the multinational banking company, in April 2015.

And in May 2015 the Bank of America announced that it would be reducing its exposure to the coal sector and stated that coal mining companies pose an increasingly risky investment, and that the Bank would increase its investment in the renewable energy sector.

 The situation in the ACT

What about the situation in Canberra? strongly supports the enlightened climate policies of the ACT Government, including its strong emissions reduction target, its strong renewable energy target, and its awareness of the need to reduce emissions in the transport sector.  But it was our concern about its fossil fuel investments which led us to commence our Fossil Free ACT Campaign in 2014.

We analysed the reports which the ACT Government releases every quarter on its equity investments.  The majority of these investments (representing more than $3 billion) are in the Superannuation Provision Account which meets the ACT Government’s future obligations for employees that were in the former CSS and PSS schemes.

In addressing the issue “divest what, exactly?” we decided to base our request on carbon reserves, because it is these reserves which, if burned, will impact directly on future changes to the atmosphere.

Consequently, we compared the ACT Government list of shareholdings with the Carbon Underground 200 list of the world’s largest fossil fuel companies, ranked according to their carbon reserves.  What did we find?

In June 2015, the ACT Government was investing in more than 65 of the world’s top 200 fossil fuel companies, including Anglo American, BHP Billiton and Glencore (all ranking in the top 11 coal companies in terms of carbon reserves) and Exxon Mobil, Total, ConocoPhillips, Statoil and Occidental Petroleum (all ranking in the top 20 oil and gas companies).  It also held shares in Whitehaven Coal (owner and builder of the Maules Creek Coal Mine) and Santos (notable for its coal seam gas developments).

An analysis also showed that the ACT Government was investing in 33 companies which were targeted for divestment by the Norway Government Pension Fund.

Our objectives for the ACT

What did Canberra ask the ACT Government to do?  Five things:

[1] To provide greater transparency by revealing the magnitude of its investments in the world’s top 200 fossil fuel companies, at least at an aggregate level

[2] To undertake research into the risks, both of divesting and of continuing to hold those equities

[3] To review its Responsible Investment Policy, in the light of its policy position on climate change

[4] To freeze its fossil fuel investments – in other words, refrain from expanding them

[5] To responsibly divest from the in-scope companies (those in the Carbon Underground 200 list) over the medium term (five years, for example).

Our strategies

We undertook a number of activities in pursuit of the above objectives:

[1] We held a public rally outside the Legislative Assembly (in March 2014)

[2] We made a submission to the 2014 Budget Estimates process

[3] We developed an Open Letter to Treasurer Andrew Barr, calling on him to freeze these investments and then develop a responsible plan to divest over the medium term

[4] We made presentations to several Labor Party Sub-Branches and policy committees

[5] We engaged with several members of the ACT Legislative Assembly, and their key advisers, to explain our position.

The Open Letter to the Treasurer was presented in September 2014.  Over 20 local organisations endorsed the Letter, including unions (CPSU, United Voice, AEU, NTEU, United Firefighters Union), the Public Health Association, the Conservation Council, the Australian Solar Council, the Quakers and others.


In 2014, the Estimates Committee of the Legislative Assembly recommended that the ACT Government research and publish the financial risks of its fossil fuel investments including modelling of what the ACT’s potential investments output could be post-divestment.  At that time the Government only “noted” the recommendation.

The divestment issue was also raised by the Conservation Council in the 2015 Estimates process.  In response to questions, the Chief Minister said that he had a “gradual phase out plan”.  He also said that “there is no need for a dramatic overnight divestment of anything in a particular sector” and that he was opposed to campaigns targeting particular companies.

However, the report of the 2015 Estimates Committee recommended “That the ACT Government consider sensible and well-timed divestment of its holdings in fossil fuels” (Recommendation 61).   Somewhat remarkably, this recommendation was supported by both Government and Opposition members of the Committee.

Following this report, the Chief Minister, addressing the ACT ALP Conference, said “I can confirm today that my Government is taking ongoing action to further divest the ACT investment portfolio of high-carbon emitting companies and sectors”.

Later, that Conference passed the following motion:

  • The ACT Government refrain from new investments in fossil fuel companies in which it does not have a controlling interest (less than 50%)
  • The ACT Government develops a plan to responsibly divest over a five year period from companies that are listed in the Carbon Underground Top 200 list published by Fossil Free Indexes
  • The ACT Government makes public its plan to divest from fossil fuels.

By the end of September 2015 the ACT Government had relinquished its shares in 11 of the top 100 coal companies and 19 of the top 100 oil and gas companies.  Among the 30 companies divested were Anglo American, Glencore, Whitehaven Coal, ConocoPhillips, Exxon Mobil, GDF Suez and Total.

Prior to this action, the in-scope companies held carbon reserves of 94 gigatons (Gt).  By late 2016, this had fallen to 15 Gt.

In an open letter to residents of the Kurrajong electorate in October 2016, the Chief Minister clarified that the scope of the divestment covered companies that have:

  • large fossil fuel reserves, in order to reduce our risk of holding stranded assets caused by possible future regulations on carbon emissions;
  • high carbon emissions, to reduce our exposure to large carbon emitters;
  • a high carbon intensity of business operations, to reduce our exposure to large users of fossil fuels; and
  • the mining of coal as their main business activity.

The Fossil Free ACT Campaign will continue to monitor the ACT’s fossil fuel investments, and to publicise the results of that analysis.

Other ACT divestment activities

350 Canberra joined with others in encouraging fossil fuel divestment by the Australian Academy of Science.  In October 2015 the President of the Academy (Andrew Holmes) announced that the Academy “would no longer hold investments in environmentally sensitive activities, and had  divested itself of direct links to fossil fuels in its investment portfolio”.

350 Canberra has commenced a dialogue about fossil fuel divestment with the Queanbeyan-Palerang Regional Council.

350 Canberra has worked in partnership with local campus divestment campaigns, such as Fossil Free ANU and the divestment campaigns of the Australian Youth Climate Coalition.

350 Canberra is also examining the possibility of broadening its divestment campaign to encompass a wide range of local institutions, organisations and businesses.


Sign up!

Sign up to receive updates from 350 Canberra with all the event, training and campaign news.

Join our next meeting

We meet on the first Wednesday of each month at 5:30pm at The Conservation Council offices. Come along and join the team!