Melbourne, 10 February 2017
Finance campaign group Market Forces is welcoming the announcement that private health fund HCF will divest from all fossil fuels in the first quarter of this year.
Representing over 680,000 Australians and responsible for $2 billion of assets, HCF holds more than $200 million in equities, about 15-16% of which is likely to be exposed to the fossil fuel sector globally, with their portfolio being more heavily weighted to less fossil fuel exposed international markets.
As such, HCF’s divestment decision, revealed in a letter to a member, could see them dump in the order of $20 million worth of shares in fossil fuel companies.
Health funds are belatedly waking up to the health impacts of fossil fuels and the resulting impacts of climate change following clarion calls on the issue from medical bodies around the world, including the Australian Medical Association and the Royal Australian College of Physicians.
The World Health Organisation has predicted that between 2030 and 2050, climate change is expected to cause approximately 250,000 additional deaths per year from malnutrition, malaria, diarrhoea and heat stress.
2003 Australian of the Year Professor Fiona Stanley said of the news: “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.”
Market Forces Executive Director Julien Vincent said: “While Treasurer Scott Morrison waves coal around in a Parliament House stunt, the smart money is dropping coal like a hot potato. HCF’s commitment adds them to the more than $5 trillion of institutions that have committed to divest from fossil fuels.
Health funds have led the broader divestment out of tobacco and in many cases munitions, acknowledging the hypocrisy of investing in products which threaten human health. As the first fund to take the step, we applaud HCF for making the right decision in shifting away from fossil fuels as well.
“HCF’s commitment has added an entire new sector to the fossil fuel divestment movement and this should send a clear message to all private health funds, which have nearly $13 billion under management, that fossil fuels are bad for our health.”
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.”