Australian National University’s divestment from several mining companies on environmental and social outcome grounds sparked severe outrage this week.

The mystery is why the reaction has been so strong.

The money lost to mining isn’t great, just $16 million. Divestment from coal by Local Government and the HESTA super funds is much greater.

But you would think the world as we know it had caved in.

Reactions

On Wednesday The Australian Financial Review led the charge.

The seven companies involved, Santos, Newcrest Mining, Iluka Resources, Sandfire Resources, Oil Search, Independence Group and Sirius, did not deserve this treatment the reports said.

The companies had won awards, including on environmental criteria from the Queensland Premier (not normally known for largesse on this score) and for remediating sites, which some might argue is the least they can do.

By Thursday the hysterics reached fever pitch with a range of critics slamming the decision.

There was front page news that cited an Indigenous consultant saying that Sirius Resources had a good track record on social outcomes.

Tony Shaw said he had formed a “brotherhood with Sirius Resources chief executive Mark Bennett” and that Shaw had found the company produced good social outcomes. Financial researcher, CAER, which had ranked the companies as a “sell” was wrong, Mr Shaw said.

Former Labor energy minister Martin Ferguson chimed in to provide more slamming of the ANU. Ferguson has history here. During Labor’s term in government, Ferguson called for coal to be protected from action by climate activists because it was in the national interest.

“They’ll have to explain themselves,” he said of the ANU.

Why?

Last we looked this is a free market economy and there’s never been a requirement to ask permission to invest in any listed company nor to withdraw from such investment.

Blair Palese

Blaire Palese, 350.org founder in Australia said, “When did it ever become an issue that an investor could not choose what they wanted to invest in whenever they want? It’s a fundamental rule of capitalism.”

The biggest outrage was around why the companies were not consulted.

Warwick McKibbin, a former board member of the Reserve Bank and “ANU’s top economist” was another luminary trotted out to add to the slamming.

Interestingly he backed a carbon price as a way to avoid such actions.

“You need proper, clear, transparent policies such as carbon pricing,” McKibbin told the ABC’s Lateline. “You don’t get the sort of adjustment we need by these token gestures by institutions like a university.”

Well… he could be right on the clear transparent policies and carbon pricing bit.

But he could be very wrong on the “token” bit.

Divestment is now a global trend

The news overnight was that this was now a global movement in full swing.

Glasgow University said on Wednesday it will divest from coal, the first university in Europe to do so.

In Australia Melbourne’s City of Moreland on Wednesday night voted to do the same – the first among its peers in Australia.

You can expect these pioneers will open a flood gate of others waiting in the wings.

In its media release announcing the move, Moreland said about 30 cities and counties internationally had already made similar commitments, including Seattle, Dunedin and Oxford.

In Australia the Anglican Diocese of Perth is another “divester”. Its bishop Tom Wilmot said, “I’m not a financial person, I’m not an accountant, I’m a bishop but in the international market the smart money is moving into renewable energy.”

On Thursday the University of NSW’s sustainability manager told us that divestment was not mentioned in its newly released sustainability strategy because a year ago when the strategy was mapped out, the issue wasn’t on anyone’s radar.

Next year, it’s almost certain it will be discussed.

ANU’s vice chancellor Professor Ian Young defended his university’s actions by saying that you needed to have a “hand on heart” approach to your investment decision making.

“We need to be able to put our hand on our heart when we talk to our students and to our alumni and to our researchers and be able to say that we’re confident that the sort of companies that we’re investing in are consistent with the broad themes that drive this university,” he said.

Among all these divesters it’s ANU that has most unnerved one of the most powerful industries in Australia. If not the most powerful.

Lurking back of mind for the miners must be the knowledge that there’s around 60 trillion dollars in superannuation funds worldwide. Worse would be knowing that these are not government controlled funds. They used to be, but the free enterprise, user-pays, small-to-no-government model much loved by Margaret Thatcher and Ayn Rand has delivered a devil in disguise for the fossil fuellers.

Here’s a heap of private money – grassroots and institutional – that’s free to do what it likes and might just be enough to save the planet.

Okay, that’s dreaming now. But there’s no telling where this stops, if ever. Humans tend to be highly inventive when it comes to saving themselves.

The point about ANU with its “token” gesture is that the miners have quickly woken up the power of an idea. Public money and government policies they can control. They “own” most governments. They can “own” huge swathes of the voting public. In Australia they paid for a powerful advertising campaign that made the public weep in sympathy with a teary, defiant Gina Rinehart, to force the government to ditch the mining tax.

What they don’t own is the power of logic and private superannuation among intelligent people.

Tom Swann

Tom Swann, a spokesman for Fossil Free ANU, said the ANU action had struck a nerve because of the prestige of the university in the policy leadership debate and its extremely strong links to government.

“It’s a lot stronger reaction than the other divestment decisions we’ve seen,” he said.

“Ultimately it comes down to the gravitas of the ANU as a member of elite policy discourse… and its very strong connection to government and strong leadership.”

“I do think that the coal industry, the Minerals Council and in general the PR machines have been threatened by this move,” he said.

On the question of consultation, Swann said he was not familiar with the process engaged with by ANU and CAER but perhaps it might have been more proactive.

However he believed that CAER did consult with the companies in question. “It’s probably sitting in their inbox and been ignored until now.”

Companies need more transparency

The Climate Institute’s Erwin Jackson said that in the absence of clarity on what the government was doing, what was mattered was that “it’s the money that talks”.

This was the free enterprise system in action.

“Ultimately the big game here is financial democracy and that the financial sector is there not just for short term profits but for longer term well being of us and the environment.”

One reply on “News from the front desk, Issue No 212: divestment, free enterprise and why miners are scared”

  1. Great story. Great quotes. I’ve circulated it on FB, LI, and to the US SRI community. And, I’ll blog on it.

    A small criticism: hyperlinks would really help bloggers, etc., to dig deeper.

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