We are proposing that Hornsby Shire council passes a motion to divest from fossil fuels. For the council, this would focus on removing money from banks that invest in coal, oil and natural gas projects. According to Market Forces, our four major banks have collectively funded $70 billion dollars into these projects since 2008. By transitioning to banks that do not support fossil fuels, the council will support the movement towards a more sustainable economy.
Shifting money away from fossil fuels not only supports the essential change towards renewable energy, it inspires a powerful message about where the council stands regarding safeguarding the community from worsening climate disaster.
Furthermore, it safeguards the council’s financial assets. In 2016 fossil fuel reserves from the coal, gas and oil industry were valued at US $28 trillion, while the world can only safely burn US $6 trillion (based on 2 degree warming).
The difference of US $22 trillion is called the carbon bubble, which potentially represents stranded assets. These are influenced by environmental challenges such as climate change, water availability constraints, changing government regulation, falling cost of clean energy technology, evolving social norms, litigation…
It is therefore financially imprudent to invest in fossil fuel assets that can never safely be extracted if the world is to limit warming to 2 degrees. As an example of stranded assets, among Australia’s biggest pure play coal producers, values have shrunk over 60% since 2012.
According to 350.org, 1028 institutions worldwide have already divested, moving $8.05 trillion dollars away from fossil fuels. In Australia, 45 councils have passed motions on divestment including the City of Sydney, City of Newcastle, City of Ryde, Randwick City Council, City of Melbourne, City of Fremantle etc. (you can find the full list of councils and institutions at https://gofossilfree.org/divestment/commitments/).
Divestment has been adopted by faith-based organisations, pension funds, educational institutions, governments (the Republic of Ireland has committed to divest), cities (New York, London, Auckland etc.), philanthropic foundation and some corporations (insurance companies).
Our review of the Investment Summary Report for October 2018 shows that 89% of council’s current investments are with banks still funding fossil fuel projects (excluding NSW T-Corp investments).
Source: Marketforces
Hornsby Shire is blessed with beautiful bush and rivers, mangroves and unique ecosystems, which are all under threat from climate change. As the “Bushland Shire”, we believe passing a divestment motion would align council money with council values. While a full divestment may not be within council’s investment policy, a motion will also give a clear signal to the big 4 banks that they need to do better when it comes to aligning their investments with the Paris Climate goals.
Here is the motion which was passed by Ryde Council at their Council Meeting of November 2017, as an example
6. DIVESTMENT FROM FOSSIL FUEL ALIGNED FINANCIAL INSTITUTIONS - Councillor Christopher Gordon
MOTION:
(a) That Council divest its term portfolio from all fossil fuel aligned financial institutions.
(b) That as Council’s current term investments expire with fossil fuel aligned financial institutions that these funds are re-invested only with non-fossil fuel aligned financial institutions with the following conditions:
(i) the investment is compliant with Council’s investment policy,
(ii) the investment rate of interest is comparable or better than those offered by fossil fuel aligned financial institutions.
(c) That a six-monthly report be provided to Council on the state of its divestment from fossil fuel aligned financial institutions.