HCF – the private health fund for over 680,000 Australians and responsible for $2 billion of assets – has confirmed that it is divesting from fossil fuels!
This is an Australian first for a health insurance fund and what makes HCF’s announcement all the more important is the fund’s recognition that fossil fuels are harmful to the health and well being of their members.
Based on HCF’s announcement, this is likely to mean about $20 million in fossil fuel shares dumped by the fund.
Over the last several years, health funds have lead the broader divestment out of tobacco, and in many cases munitions too, finally acknowledging the hypocrisy of investing in products destructive to human health.
Yet health funds have resolutely ignored the health impacts of fossil fuels, and the resulting impacts of climate change – until now. Medical bodies around the world have communicated the systemic threat climate change poses to public health, including the Lancet and locally, the Australian Medical Association and the Royal Australian College of Physicians.
Private health funds in Australia collectively manage about $12.8 billion (as at 30 September 2016). Approximately 11% or $1.42 billion of that amount is invested in equities, which is likely to be evenly distributed between Australian and international markets. But almost all their equities exposure is likely to be passive, i.e. automatically tracking an index. A wave of health funds divesting from fossil fuels may be the catalyst for passive index managers like Blackrock, State Street and Vanguard to finally produce a fossil fuel free product for the Australian market.
Though the assets managed by the private health fund industry pale in comparison to the superannuation industry, divestment across the sector would send a clear signal to the rest of the investment community about the health impacts of fossil fuel use and climate change.
At this stage, HCF is the only Australian health fund to have divested from fossil fuels. Yet, given their vulnerability to a public campaign, HCF is unlikely to be the last. If we needed a textbook definition of hypocrisy – then health funds investing in assets destructive to human health is surely it.
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What the health professionals said
Renowned Epidemiologist and 2003 Australian of the Year Professor Fiona Stanley:
“Fossil fuels are a major contributor to air pollution, which is now close to tobacco as a leading cause of death globally. Moreover, the greenhouse gas emissions from burning fossil fuels will put people’s health at risk for generations as climate change impacts take effect.
“Human health and financing fossils fuels are fundamentally incompatible. Institutions that are concerned with protecting and improving people’s health should be doing everything they can to steer our economy away from fossil fuels.”
Professor Kingsley Faulkner, surgeon and Chair of Doctors for the Environment Australia:
“Responsible health organisations are making a stand and we are delighted that HCF has decided to join them and divest from fossil fuels.
“The health consequences of climate change are becoming increasingly apparent in many countries including Australia. The predicted health impacts of failing to [take action] are huge. History will be harsh on those who fail the moral and political challenge to act without further delay. As with tobacco control, Australia could again become a leader rather than a reluctant follower.”
Dr Helen Redmond from Doctors for the Environment Australia:
“In Australia, 3000 die prematurely every year from air pollution, largely due to fossil fuel use, and heat is already responsible for more deaths than all other natural causes combined. We applaud HCF for recognising that fossil fuels are a health hazard. To avoid contributing to the health impacts of climate change, divestment is vital for all health organisations.”