Australian health fund follows international organisations moving to divest in coal

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Between June and September in 2014, a number of key US, Australian and UK health organisations moved to divest in coal, together with superannuation and philanthropic groups. Key events such as the United Nations (UN) Global Leader’s Climate Summit on 23 September in New York, have amplified and accelerated the monumental shift away from fossil fuel investments.

Other events that have fuelled change include the “Business, Health and Climate” reception and panel discussion, in New York, just prior to the UN sumit. The event was organised by the University of Wisconsin-Madison Global Health Institute and involving green leaders from the World Health Organisation.

The following provides an overview announcements that flowed from this event and earlier developments in support of the global movement turning investors away from fossil fuel assets (divestment).

For example, the day before the UN Climate Summit, Gundersen Health System announced it will be freezing future corporate investments in fossil fuels as part of its efforts to promote sustainability in healthcare. Gundersen is the third health-focused organization on a third continent to restrict investments in fossil fuels, motivated by health, moral, and financial considerations.

The same day, the Rockefeller Brothers Fund, a $860 philanthropic organization heir to the Rockefeller family’s oil wealth, announced that it will divest from fossil fuels. The New York Times’ John Schwartz reported:

“The family whose legendary wealth flowed from Standard Oil is planning to announce on Monday that its $860 million philanthropic organization, the Rockefeller Brothers Fund, is joining the divestment movement that began a couple years ago on college campuses… In recent years, 180 institutions — including philanthropies, religious organizations, pension funds and local governments — as well as hundreds of wealthy individual investors have pledged to sell assets tied to fossil fuel companies from their portfolios and to invest in cleaner alternatives. In all, the groups have pledged to divest assets worth more than $50 billion from portfolios, and the individuals more than $1 billion…The people who are selling shares of energy stocks… say they are taking action to align their assets with their environmental principles. Others want to shame companies that they believe are recklessly contributing to a warming planet. Still others say that the fight to limit climate change will lead to new regulations and disruptive new technologies that will make these companies an increasingly risky investment.”

Earlier in September, the Health Employees’ Superannuation Trust Australia (HESTA), with over $29 billion AUD in assets, announced a restriction on investments in thermal coal. John Conroy of Business Spectator reported:

Anne-Marie Corboy of HESTA super fund

Anne-Marie Corboy of HESTA super fund

“HESTA chief executive, Anne-Marie Corboy, said the fund has begun restricting thermal coal investments across its portfolio, following a decision by the fund’s board…. It is the first major Australian superannuation fund to restrict thermal coal investments across all its investment options. While some other funds have a restriction on thermal coal investments, it is typically limited to their socially responsible investment options. HESTA’s Investments and Governance Team expects that the push to limit global warming, through a reduction in the burning of carbon, is likely to impact investments in fossil fuel reserves in the long term.”

There is growing recognition among health organisations in particular, that fossil fuel assets are over-valued because of the ‘unburnable carbon’ concept. This financial system risk is increasingly being acknowledged as having the potential to send markets crashing, leading to the establishment of more ethical investment and superannuation funds such as Super Switch in Australia.

Momentum for divestment by health care organisations began in June 2014, when the British Medical Association (BMA) moved to transfer its investments in fossil fuels to clean energy – making it the first health organisation in the world to do so. The decision was expressed in a motion passed at the annual meeting of the BMA in Harrogate, calling on the BMA to “transfer their investments from energy companies whose primary business relies upon fossil fuels to those providing renewable energy sources.”

The decision, instigated by members of the Retired Members Forum of the BMA and supported by the Climate and Health Council, comes on the back of increasing support for the fossil fuel divestment movement within the UK health community. An editorial published in the British Medical Journal in March this year called for divestment, while health charities Medact and Healthy Planet UK, representing health professionals and students respectively, launched a campaign earlier this year calling on UK-based health organisations to divest from fossil fuels.

Stay up to date and learn more via heathcare’s role as a leader for environmental change at:
Global Health Care Without Harm

Climate and Health Alliance (CAHA) in Australia – running a forum on Greening the Health Sector in Brisbane, 14 October 2014

Read about CAHA’s joint statement with the Climate Council on the ‘Health Effects of Coal in Australia’ here.

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