Over 100 people attended The Climate Institute organised “DivestInvest Conference” in Sydney April 5, 2016. Welcomed by John Connor CEO of the Institute, it explored investment responsibilities in the face of Climate Change (www.divestinvest.org.au/#intro).
The reality of human induced climate change was accepted as was its increasing negative impacts on the world, but how to respond financially was the focus of the conference. The International keynote speaker was Stephen Heintz, President of the Rockefeller Brothers Fund. He said that fossil fuel dependent resource companies do not have a bright investment future with some companies at risk of being left with stranded assets. Risk management is crucial. Technology is advancing rapidly, a game changer, so that alternative energy sources are becoming cheaper. Smart investment money is moving to support adaptive companies.
He went on to say that many company boards are unskilled especially if they stay with traditional investment patterns. All organisations handling superannuation or other funds will need new board members with a wider skills-set to plan a transition of investments.
Public demand for both political and economic leaders to adapt to climate change realities, as well as for them to be aware of technological advances, motivate action for change. The social good as well as the survival of companies and help organisations with investments is at stake.
Participants were drawn from a range of investment advisors and financial managers, philanthropic institutions and new technology providers. Clients include large superannuation funds, foundations and universities, small organisations, NGOs and individual people. Large or small, investors face the same risks from the impacts of climate change and technological innovation. Divesting from fossil fuel dependent companies is only the beginning and the easy part. More important is how to invest funds wisely.
Detailed presentations filled out the broad aims of the conference. Divestment requires understanding risks linked to climate change, analysis of portfolios and accurate measuring before choosing alternatives. Managers have fiduciary responsibility towards the fund owners to preserve capital value and future security with their portfolio. Besides being good investment policy, such practice would help fulfil the aspirations of COP21 Paris where nations pledged to limit greenhouse emissions that threaten the earth’s climate cycles.
Sectoral interest groups shared their specialised concerns. Church sector people came mainly from Religious Congregations with a small agency or diocesan presence. All warmly quoted from the environmental encyclical of Pope Francis, Laudato Si’, and the way he linked ecology, economy, politics, compassion and future generations under the phrase ‘integral ecology’ as a spiritual and ethical call. They wrestled with conference inputs about risks emerging from climate change, fiduciary duties and ability to fund their works into the future. Columban Regional Director Fr Gary Walker in Australia and New Zealand attended the conference.
Former Prime Minister Dr John Hewson gave the closing address. He said that living in a zero carbon economy could be the fastest and biggest transition in human history. What kind of investments will be needed to reach that destination safely, prosperously and quickly? What kind of investors and cultures will be fit for the purpose?
Columban Fr Charles Rue is on the staff of the Columban Mission Institute, North Sydney.
Read more from The Far East, June 2016