Fossil Fuel Divestment
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In April 2013, a decision was passed by consensus by the Uniting Church Synod of NSW and the ACT in April 2013 to divest from fossil fuels and invest in renewable energy.
That the Synod:
(a) its previous resolution on climate change, which called for creation care to be integrated into all aspects of the church’s worship, witness and service;
(b) the clear evidence that the threat of climate change is not being adequately addressed by our state and federal governments, or the international community;
(c) that rapid expansion of fossil fuel mining (particularly coal and coal seam gas) in Australia is directly threatening agricultural land, human health and biodiversity;
(d) that its Ethical Investment Principles call for divestment from companies whose activities “involve substantial change to the environment, which is not or proposed to be made good at the conclusion of the activity”;
(e) that to avoid more than a 20% chance of global temperatures rising beyond the ‘extreme danger benchmark’ of 2 degrees, 80% of the known coal, oil and gas reserves will need to remain untouched;
(f) the global “Go Fossil Free” campaign to divest from fossil fuel corporations, which is based on the very successful global divestment and sanctions campaign against South Africa during the apartheid years;
(ii) determine as a matter of policy that the Synod should divest from corporations engaged in the extraction of fossil fuels and move instead to investing in renewable energy stocks.
(iii) request the EIMC identify the companies affected by this policy, and bring a report to the October meeting of Synod Standing Committee (in a session to which the proponents are to be associated), with the expectation that if the policy is not found to be impracticable, it will be carried out.
(iv) require all NSW/ACT bodies whose investments are not managed by Treasury and Investment Services to implement the policy once finalised by Synod Standing Committee.
(v) request the General Secretary write to other Synods and the Assembly advocating that they also join the divestment campaign.
In October 2013, the Synod Standing Committee approved the following implementation strategy, prepared by Synod’s Treasury and Investment Services (T&IS), for divestment from shares in companies engaged in the extraction of fossil fuels:
- Instruct the managers to proceed with their divestment of all stocks that have a greater than 40% net exposure from direct fossil fuel extraction before 19th October 2014
- Instruct the managers to proceed with their divestment of all stocks that have a greater than 25% net exposure from direct fossil fuel extraction before 19th October 2015
- Instruct the managers to proceed with their divestment of all stocks that have a greater than 10% net exposure from direct fossil fuel extraction before 19th October 2016
- Review the divestment strategy, particularly with respect to the issue of net versus gross exposure, prior to October 2015 to determine the practicality of further divestment in year 3.
- Instruct the managers to reinvest complying with the Ethical principles and procedures
- Due diligence on alternate managers to be completed before 19th October 2014
- Yearly review of the renewable strategy of each of the organizations (with consideration to research and development spend)
- The Trustee is required to notify the unit holders of the decision and the divestment strategy in place
- Notification of change to unit holders
% materiality: The Synod’s current ethical investment principles specify 5% revenue in the offending industry as the threshold for divestment from a company. A % materiality approach is therefore taken for the fossil fuel divestment strategy.
Net revenue exposure: Net revenue exposure is calculated by subtracting the % revenue earned from renewables from the % revenue earned from fossil fuel extraction.
Intro: In October 2013, the Synod Standing Committee approved an implementation strategy for divestment from shares in companies engaged in the extraction of fossil fuels.