On how to spook the mining industry and extract the green stuff from the brown stuff

UPDATED 5 September 2014 –The fury around the unrelenting attacks on the environment is building strongly. People are voting with their wallets on fossil fuels and that’s probably the most dangerous political movement you can get. The mining industry is spooked.

Launched on Thursday was Australia’s first fossil free and ethical superannuation fund. It’s called Future Super. It’s headed by former GetUP chief Simon Sheikh and includes investors such as Bendigo Bank and Simon Holmes a Court.

The other big move this week was the launch of Super Switch by 350.org and Market Forces.

The tool works by finding information on where super funds are exposed to fossil fuels and publishes it, the Super Switch tool website says.

The tool initially profiles 35 superannuation funds that account for 74 per cent of funds under management in the $1 trillion managed superannuation sector.

Leaders in the mining industry have called for serious action to combat what it says is “green imperialism” at its worst.

Here’s what miners told The Australian Financial Review in recent days. (Warning for sensitive souls who don’t like the sound of threats and hot air.)

Whitehaven Coal boss Paul Flynn on Friday said that “the coal industry should fight harder against the global campaign urging investors to dump investments in fossil fuels, which he labels ‘green imperialism at its worst’”.

He said that the global divestment movement is “very selective” with their case, and the coal industry needs to dedicate more resources to countering it.

Peabody Energy chief Greg Boyce said, “coal producers must spend more time and money fighting ‘symbolic’ movements like the divestment campaign”.

If it’s just symbolic, why worry?

Here’s why. Inside sources at Future Super say the superannuation fund is just the start. What’s coming is a whole suite of financial services, perhaps even a bank and mortgages. Whoa… a people’s bank?

Not only does the pesky divestment campaign run by 350.org seem to be working but it’s spawning a host of DIY grassroots movements with the power to take the green stuff away from the brown stuff.

Former Liberal leader and now champion of fossil fuel disclosure campaigns John Hewson said the fund would spawn a proliferation of similar funds, and on a global basis.

And here’s another reason – Hewson is already right.

The University of Sydney has said it won’t add any more coal investments to its assets. And outfits like Bendigo and Adelaide Bank, AMP Capital, education industry fund Unisuper, bankmecu, Credit Union Australia, Beyond Bank and Defence Bank are heading down the same path.

Also worrying to the mining industry might be the strong growth in members and profits and funds under management results posted by Australian Ethical Investment this week.

Although it still invests in fossil fuels through gas companies and companies that service the fossil fuel industry, its higher than average ethical hurdles has attracted record investor numbers and funds now tipping the $1 billion mark and profits up 139 per cent.

There be trouble at political mill too

More evidence that the miners are right to worry also emerged this week with the government’s favourite pollsters Crosby Textor releasing research that showed support for the Renewable Energy Target has leapt by a huge amount, belief that it causes prices rises has fallen and the number of people who think wind turbines are ugly is also down, despite no change in their design, and revealing much about how many people you can fool and for how long.

The clean energy lobby groups warned the government’s attacks on renewable energy, in particular solar, is an attack on small business and this makes it a hot political issue.

Research from Solar Business Services conducted for the REC Agents Association, or RAA, found that 52 per cent of solar firms are microbusinesses, with less than four employees and more than 90 per cent of the 21,000 Australians who work in the solar industry work for SMEs.

On Monday the REC Agents Association said the government would directly hit small and medium size business that had in the past 10 years pumped $17 billion of sales into the economy plus “tens of billions of indirect expenditure”.

“Some 96 per cent of Australia’s 3800 solar PV businesses are micro, small and medium sized enterprises,” president of the REC Agents Association Ric Brazzale said.

That’s a dangerous heartland to whack with a big bazooka as government abolition of the RET or its slow death spiral would mean. And it’s a very (Mr Appleby) brave government that decides to do this.

If the RET is axed, demand for solar will fall by 40-50 per cent, with the potential closure of thousands of small businesses across Australia, Brazzale said.

Energy expert Alan Pears said in The Conversation that, “Unfortunately, renewable energy has become a political football, even though before the election the present government claimed to support the RET. The dominance of politics over evidence-based policy seriously undermines business confidence and increases societal costs in the future.

“We need to grasp the future instead of propping up the dinosaurs.”

The options presented by Warburton were similar to going back to landlines instead of mobile telephones, he said.

Don’t underestimate the mining industry

Never underestimate the wrath and might of the people with the Euclids. This week saw the remnants of the mining tax finally put to rest after the mining industry launched an all out war and the mother of all media campaigns to have it rescinded.

The tattered remains of the tax, redesigned by the industry itself, were worse than useless.

But the strength and power of the mining industry is exactly its Achilles heel. The miners worked through the clever manipulation facile political vulnerability – the voters who don’t read past the headlines and believe a weeping Gina Rinehart crying foul and poor.

It won’t be so easy to target the people who think and care about where their superannuation is going.

According to research from The Australia Institute the potential is to tap 25 per cent of all superannuation investors, or more than $240 billion of investment.

That ought to hurt. And let’s see the clever advertising wiz kids try to change the thinking and tell us coal is good.

Legislation to axe EEO program passes

The federal government has successfully axed the Energy Efficiency Opportunities Program, which has saved industry more than $800 million since it started under the Howard government in 2006.

As previously reported in The Fifth Estate, a program review in 2013 had found the benefits of the program had outweighed the costs by more than three times.

When announced in May, The Fifth Estate criticised the Property Council of Australia for applauding the move, which it said would reduce “red tape” for the property sector.

While it may be true that there was duplication in the property sector, we said, for the industrial sector the savings in carbon emissions and electricity were mammoth, with follow-on benefits for Australia’s economy and competitiveness.

“It’s not a good look to congratulate throwing the baby out with the bathwater, especially at times like these.”

Seems the message was lost, with the PCA today sending out a message again congratulating the axing.

“The property industry has led the way on energy efficiency by adopting transparent rating tools and embracing competition,” PCA chief executive Ken Morrison said.

“Requiring property companies to demonstrate that commitment on an annual basis was redundant and costly.

“Eliminating needless reporting means that property companies can focus on the real business of sustainability, rather than filling in paperwork.

“The repeal of EEO demonstrates the direct benefits of the Government’s red tape agenda – with savings exceeding $17 million per annum.”

We understand the PCA is here to lobby for the property sector, but the axing of the EEO was extremely poor policy and it would be nice, though perhaps wishful thinking, if lobby groups could occasionally take their blinkers off and have a peek at the bigger picture.

We’ll leave the final word on the matter to our industry source:

“Howard – hardly known as a ‘greenie’ – introduced a program that has helped companies save millions of tonnes of CO2 – and dollars – and then his successor decides to scrap it on the grounds that it would reduce compliance costs,” the source said.

“Not even Labor was that short sighted.”

4 replies on “News from the front desk: Issue No 207”

  1. Hi Fifth Estate, the comments in this article regarding

    “And it names OnePath, with 22 per cent exposure, Care Super on 16 per cent and Local Government Super on 15 per cent and State Super on 12 per cent as the worst offenders.”

    do not appear to be correct. I’ve just visited the Superswitch website and Local Government Super appears to rate quite highly relative to the other funds.
    Cheers
    Peter

  2. Tina,
    Thanks for the insights into finance issues. The good news is that there are already ‘peoples’ banks’ as you call them. we don’t need to wait. Credit unions, co-ops and mutual banks; in fact more than 4 million Australians already bank with them, and many have a robust policy on fossil fuels as well as a core focus on community and people. The NGO campaigns are moving customers and creating market transparency. Fossil fuel free banking is as widely available as solar already is. As William Gibson put it: “The future has arrived — it’s just not evenly distributed yet.”

    Corin Millais, Teachers Mutual Bank

    1. Thanks Corin, 4 million investors already? That’s fantastic. And it explains why the fossil fuellers are planning an almighty mother of all campaigns to halt the flow of money out of fossil friendly investments. But I think they will find it’s far easier for people to part with their votes than their money.

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