WEDNESDAY 14 JUNE, 2017: Environmental finance group Market Forces is calling on Australian superfunds and asset managers to follow the example of the second largest pension fund in the US and divest from Australian coal companies such as Whitehaven.
Last week, the board of the US$200 billion California State Teachers’ Retirement System (CalSTRS) voted unanimously to divest from non-U.S. thermal coal, including Whitehaven in Australian and PT Adaro in Indonesia.
“The regulatory risk and environment impacts climate change places on the fund far outweighs the ability of thermal coal companies to continue to create long-term value,” said California State Controller Betty T. Yee, a Teachers’ Retirement Board member.
Going further, California State Treasurer John Chiang, stated, “coal is the fuel of America’s past…. CalSTRS did what was right for California’s taxpayers, for our members and for the planet.”
Australian funds, however, remain almost universally invested in coal stocks. Even so-called progressive funds such as Colonial First State, which has publically supported the Paris climate goals of keeping the world to ‘well-below’ two degrees, continue to be heavily invested in coal stocks such as Whitehaven.
“Almost every Australian is exposed to high-risk, high-carbon investments due to the failure of the investors who manage our money to understand the threat climate change poses to their portfolios,” said Market Forces Analyst Dan Gocher. “Hopefully, this clear common sense statement from one of the world’s most influential pension funds will start to shake them out of their current torpor.”
In a public statement, CalSTRS also clearly noted the total lack of impact from ‘extensive engagement’ with thermal coal companies.
“Australian investors often fall back on the excuse that engaging with coal companies is a more constructive approach than divestment, said Gocher. “Unfortunately, this has not resulted in sufficient tangible change. The raison d’etre of coal companies is to sell a product which has no place in the future of energy production and as such, should equally have no place in the portfolio of investors.”