Sometimes big business drives change before governments make decisions to follow similar paths. Following the announcement by two major Australian superannuation companies, to turn away from investing in coalmining companies, Geoff Helisma takes a look at how that concept has played out at Clarence Valley Council.

At the very first meeting of the current Clarence Valley Council in October 2016, Greens councillor, Greg Clancy, began encouraging his fellow councillors to “actively seek to divest its term-investment portfolio from all fossil fuel-aligned financial institutions”, however, when it came to a vote at the November CVC meeting, only Cr Peter Ellem was on board, at least in terms of his opposing the adopted motion, that the “existing investment policy remain as it is”.

Councillor Clancy’s motion was not debated due to a meeting procedure quirk, which allowed an alternative motion to be put first.

Councillor Clancy had outlined a method to make divestments that would result in reinvesting CVC’s term investments with fossil fuel aligned financial institutions (as they expired), with investments in non-fossil fuel-aligned financial institutions.

Further, Cr Clancy conditioned his suggestion with: “a) the investment is compliant with Council’s Investment Policy; and, b) the investment rate of interest is comparable or better than those offered by fossil fuel aligned financial institutions.”

Cr Clancy backed up his proposal by pointing out that seven NSW councils had already completed what he was suggesting, according to a November 2015 report, Local Government Leadership on Fossil Fuel Divestment, prepared by world.350.org.

Meanwhile, two major Australian superannuation companies – Hesta (valued at $52billion) and First State Super ($122billion) – have recently announced that they are divesting from thermal coal mining companies.

Looking towards what the future may bring, Hesta CEO Debby Blakey said, “Climate change presents a financial risk to the HESTA investment portfolio and the world in which our members will retire.

“An urgent response is required … that reaffirms our ongoing commitment to leadership in responsible investment and can help protect and enhance the long-term performance of our members’ investments, while driving meaningful change and contributing to a healthier planet and society.”

In February this year, Investment Magazine wrote in a story titled Super funds shrug off divestment pressure: “A Responsible Investment Association Australasia survey last year found that just seven funds out of 57 respondents, who together oversee more than $1.7 trillion, applied some form of fossil-fuel exclusion to their portfolio.

“That’s up from three in 2016 but compares to 33 who exclude tobacco and 21 who avoid armaments.”

Over the term of his councillorship, Cr Clancy has regularly voted against the monthly investment report, “to keep the issue before council”, however, his advocating on this issue has been opposed by a majority of councillors.

For example, at the April 2019 CVC meeting, Cr Clancy attempted to modify CVC’s monthly investment reporting, by including the percentage of funds invested with non-fossil fuel financial institutions – councillors Novak and Ellem were in support.

During debate, he said it was his “intention” for CVC to “invest a percentage” of its investment portfolio with institutions “who do not invest in fossil fuel companies”. 

However, councillors Karen Toms and Andrew Baker argued that the change would result in unnecessary work for CVC’s staff.

“…I see no benefit to have future reports showing the percentage of funds,” Cr Toms said.

“It does not warrant our staff researching that information.

“Councillor Clancy could do it himself if he’s really interested.”

This week, Cr Clancy told the Independent that “the percentage of [CVC’s] non-fossil fuel investments is now at about 30 per cent, which is lower than when I first raised the issue”.

However, at the same meeting, councillors debated CVC’s Climate Change Committee’s request to “declare a Climate Emergency so that all of Council’s actions and decisions are examined against the urgency to address and minimise the effects of climate change”.

This discussion had been deferred from the November 2018 meeting, “to allow for further investigation on the operational and financial implications”.

After lengthy debate and several amendments, councillors, apart from Andrew Baker and Arthur Lysaught, “recognised that there is a climate emergency which requires actions by all levels of Government”.

Council staff had compiled a list of up-to-date climate change data, attributed to the relevant organisations – BOM, CSIRO, NASA, IPCC and the UN Emissions Gap Report 2018 –, and pointed out that the advisory committee had “referenced over 300 local authorities around the world, including 12 in Australia, that have now either declared or recognised a climate emergency”.

Staff also advised that “by recognising a climate emergency, Council will be seen as an organisation making an important leadership contribution to the global goal of mitigating climate change impacts”.

Specifically, staff advised that declaring a climate emergency would provide “a platform for continuing Council’s own emissions abatement efforts”, including implementing the 100% Renewables Report, which is complimented by CVC’s Greenhouse Gas Emissions reduction and Renewable Energy targets final report, adopted in September 2018.

On June 20, CVC held its initial engagement with businesses, regarding its community climate action plan, which focused on greenhouse gas mitigation.

While participation numbers were low, CVC is holding another ‘Zoom’ conference for interested businesses at 4pm on Wednesday July 22 4pm – any business that would like to participate can email their interest to CVC at council@clarence.nsw.gov.au.

The council is currently pursuing an initiative to recommission and take ownership of the Nymboida hydro power station, as a result of Cr Richie Williamson’s initial notice of motion in June 2018.

At the October 2019 CVC meeting councillors were provided with a confidential “desktop investigation into the economics of CVC generating electricity at the Nymboida hydro power station” (as agreed with current owner Essential Energy) and have continued to receive quarterly confidential reports on the initiative’s progress.

More about CVC’s climate change policies and initiatives are available on its website.

The council will also be facilitating community climate action plan consultations with the wider public on dates yet to be announced.