Newly elected Greens representative on the Clarence Valley Council (CVC), Greg Clancy, has not wasted any time in pursuing his agenda.
Councillor Clancy, who is the first politically aligned councillor elected to CVC in its 12-year history, has proposed a motion that, if successful, would eventually result in CVC “gradually divest[ing] its term deposit portfolio from all fossil fuel-aligned financial institutions”.
The matter, which was discussed at yesterday’s Corporate, Governance & Works Committee meeting, will be tabled at next week’s council meeting at the Grafton chambers for a decision.
In his Notice of Motion (NOM) summary, Cr Clancy wrote that the proposed policy change should be achieved whilst earning “a comparable interest rate for our investments”.
“This motion is solely concerned with invested funds (term deposits) and not everyday banking accounts,” he wrote.
In making his case, Cr Clancy wrote, in part: “The science is well and truly in on this topic and there is not a single national government that disputes that burning fossil fuels is creating global warming and, as a result, [there are] rising sea levels and more extreme and unpredictable weather events.
“There is also growing consensus that all Governments need to do more to reduce greenhouse gas emissions in order to stay below the critical limit of 2 degrees warming.
“Nine NSW Councils have already passed divestment motions.” * Cr Clancy has advised that this should have, in fact, said “seven NSW councils”.
He pointed out that the CVC Climate Change Advisory Committee had, in June 2015, carried a motion that CVC’s “investment strategy should avoid exposure to the fossil fuel industry”.
Since that time, this advice has not been tabled at a council meeting.
“By divesting from institutions that fund the activities that are exacerbating global warming, Clarence Valley Council will not only be taking a positive leadership role but will be encouraging other Councils and institutions to also follow suit,” Cr Clancy wrote in his NOM.
Corporate director Ashley Lindsay, however, advises in his response to the proposal that, according to www.marketforces.org.au/banks/compare (“the accuracy of which I am unsure” – the website was provided as a reference point by Cr Clancy), “the domestic major banks (ANZ, CBA, NAB and Westpac) are all rated AA-.
“They rank amongst the highest commercial banks lending to Fossil Fuels in Australia, according to the … website,” Mr Lindsay wrote.
He wrote that that $21million of the council’s $75million in investments, which are in term deposits and floating rate note investments, are with the big four banks.
“As at the 31 August 2016 Council has $25 million (excluding ‘Funds at Call’) invested with fossil fuel investing institutions,” he wrote.
“If Council adopts a ‘free fossil fuel’ investment policy, this would eliminate the major banks rated AA-, as well as some other A-rated banks (Macquarie Bank as an example).
“Council would be left with the remaining A, BBB and unrated ADIs [authorised deposit-taking institutions].
“Is Council comfortable with this decision?
“Can Council tolerate an entire investment portfolio with these ADIs, noting that it currently does not hold any unrated assets?”
Mr Lindsay also provided an extract from the Department of Premier and Cabinet – Division of Local Government – Investment Policy Guidelines May 2010 to inform the councillors, and advised that a copy of CVC’s current investment policy is attached to the business paper: these can be downloaded from CVC’s website.
*Note: According to a report, Local Government Leadership on Fossil Fuel Divestment, prepared by international environmental organization, 350.org, the seven NSW councils that have divested funds from fossil fuel-aligned financial institutions, as of November 2015, are: Marrickville Council $55,000,340, Leichhardt Municipal Council $79,702,199, Lismore City Council $50,017,029, Gloucester Shire Council $6,419,922, Newcastle City Council $286,104,501, Byron Shire Council $75,962,424, and Albury City Council $81,190,223.