Divestment – Money As A Force For Good

Jaydon Inott, after making numerous eco-sensitive lifestyle changes, realised the institutions handling his money were bankrolling the very systems causing the problems. He decided to divest from destruction with a simple 4-step process and join the global movement for Divestment Day in  October.

Are you concerned about the expansion of coal & gas projects set to decimate our coastline & reef? Do you feel as if your voice is not being heard to stop the destruction?    •  Over 75% of Australians are concerned about coal & gas projects on our great barrier reef – but it still goes ahead. [i]

Do you know that your bank might be using your money to fund these atrocities?     •  Commonwealth, ANZ, Westpack & NAB are all in on the deal to bankroll dirty fuels all over Australia[ii]

Want to make your voice heard, take action & use your money as a force for good?     •  See the Step-by-Step guide below to link to the great tools by Market Forces & 350.org to help you do just that.

We currently stand on the precipice of allowing Australia to unearth enough coal and gas to single handedly release up to a third (between 15%-33% depending on the source you reference [iii] [iv]) of the global CO2 quota that remains if we are to preserve a safe climate[v]. The knock on effects stemming from pressures on our ecosystems, make this the pointy end of any humanitarian or conservation battles[vi] [vii].

While many of us recognize the need to drive change to a carbon neutral (ideally negative) economy through our consumer habits, we may not have considered what is happening with our money in the banks, supers and investments. I am one of the many who may have felt encouraged by the fleets of Toyota Prius that fly by emblazoned with bank logos and appreciated cards adorned by wildlife pictures. While doing this though, I was horribly unaware that the same institutions are bankrolling the activities that I am morally opposed to. In 2011, around the time when HSBC was hosting the ‘Business Summit on Climate Leadership’, Rio Tinto was using HSBC money to buy new coal projects in Mozambique. Thanks to some great information, which I share with you here, we are able to look beyond this hypocracy and make choices that reflect our intentions; NO further coal & Gas projects, through moving to banks which promise an investment strategy we can agree with.

I hope that we can all recognize the need to celebrate any steps in the right direction, as we need to for each other, in encouraging positive change. Let’s not be fooled though, the activities that are being funded (as you can see from Step1 below) grossly outweigh any LED lights they may have in their offices, and our involvement with them can undermine our own efforts. It is time for us to pull together and make sure we put this right by getting ready for the next Divestment Day on 18th October.

Pulling together the excellent tools provided by the teams at Market Forces & 350.org, I hope to share how we can ensure that our money is being used our as a potent force for good. We will see how involvement in divestment campaigns can provide a megaphone for our voices and drive change through the market. In doing so, we add another string to our bow to put a stop to the shortsighted, ill-conceived plans on our east coast or at least make sure our actions are in line with our voices in condemning this activity. Lastly I provide a step-by-step guide to take action and supplement the Market Forces material with some tips from my experience.  I can guarantee one thing; it is a great feeling to take just 5 minutes to put your bank on notice if they are up to no good (See Step 1 below)!

It was a few years ago that I stumbled on a Climate Science book to look at the science behind the headlines. It had a profound effect that has dictated many of my choices ever since. From what became a large and emotionally taxing period of enquiry into this and interlinked issues and appreciating the gravity of change required, I was to emerge the way I believe each of us could to achieve the results we need; deriving pleasure from making positive steps forward in our personal lives.

My Girlfriend and I started small, following environmental groups on social networks, challenging each other to use a less plastic and reminding each other to have our Keep Cups to hand. It all seemed pretty futile when you observe all around you, but felt better nonetheless and the visibility of even these small changes to others was obvious. We supported each other as we detached from the lunacy of using bottled water in our offices and learned how to deal with the resulting conversations from intrigued colleagues. I started sharing my ride to work and, when the time was right, quit my job to cut the long, daily commute and business trips, permanently out of my routine. It continued to shape our lives in our choice of energy providers, documentaries we shared with friends and where we got our food.  These positive steps were the catalyst that lead to exploring Permaculture.

I realized, however, that many of the steps I had made to transition into a more eco-sensitive way of life were being  undermined by the investments I was supporting through my choice of bank. We become acutely aware of the current we are swimming against when we see our government blindly leading us to a giant mining pit for short-term gain. Empowered by information now available, we have an opportunity to make real informed choices about how our money is used and raise a megaphone to deaf ears with (maybe the only) language our current government understand; money, using its potent influence on a system we know they value; the free market.

According to 350.org, over $250 million has been shifted out of the Big 4 Banks since December 2013 by customers who don’t want their money funding fossil fuels. Research shows that a further $236 billion is at risk of being shifted if the Banks don’t give fossil fuels the flick i.

 

Do Divestment Campaigns Work?

A common thread through all that we learn in permaculture, observation of nature and, for me at least, life in general, is that diversity gives us strength. Diversity, whether it’s how many skills you have on your CV, or how many species are planted in your garden, gives us the resilience that we need in this highly changeable world. When we’re faced with an issue requiring such a profound response as the climate crisis, we are naturally led to thinking of how we can diversify our approach and adapt. This is one of the great influences of permaculture principles for me. Applying this approach to creating solutions, directs us to do more than intensify our response on any one initiative, and make sure we are driving change on multiple levels. Each of these changes support each other in edging towards the cumulative shift that we need.

The first divestment campaign was in South Africa during the anti-apartheid movement. Here it was considered to be instrumental in empowering leaders though the transition. This was communicated by the late Nelson Mandela and more recently voiced in this short video by Desmond Tutu.

This action also has its early roots in Permaculture with ‘Divesting From Destruction’ being one of the core tenants of permaculture’s economic strategies, articulated by Bill Mollison in 1983. This was when the Earthbank Society was conceived and permaculture pioneered the ethical investment movement in Australia.

There are some question marks over the mechanism for personal divestment to deliver an appreciable economic outcome to dissuade projects. However, even economists who have critiqued the movement on this level, accept the role it has in shaping public discourse [viii] [ix]. Many of these arguments fall into the classical oversight of our times by not placing a value on natural resources and failing to appreciate the downstream costs associated with continuing ecosystem degradation. Other criticisms simply seem to stem from nothing more than companies looking to protect their assets.

Filtering through this we can look at some noteworthy claims:

1: Investors are abundant and new ones will take the place of any that are turned away from big coal.

–  A reduction in competition for shares will conceivably lead to lower prices, making it harder for the companies funding coal projects to raise funds.

–  It may leave companies to choose less favorable investors, meaning they take on more risk, which undermines their business for the future and prevent further investment opportunities.

2: People consider that their bank balances are too small to have effect.

– When your action helps gather more momentum it quickly can escalate far beyond the impact that your money has. The visible shift in opinion can empower larger institutions to make the move. Sydney University & Stanford University withdrawing their sizable investments from fossil fuels.

– Personal savings held in accounts are leveraged by banks in obtaining investment funds so each bit of money moved can have a disproportionate impact; A run of a bank is a very significant risk for them.

 

Regardless of this, we must come back to the powerful statement that a collective move to divest from the banks will have in demonstrating public opinion — especially since there is no referendum being held on these topics. Also, and maybe more importantly, we simply do not want our money being used for things we are morally opposed to.

 

A key consideration here is that the threat on larger banks could lead to the wider economy being affected (as businesses other than fossil fuel companies are heavily entangled with these banks who could suffer operational losses and so pass costs down). So, as ever, it is important that we make this action consciously. Unfortunately, the current political climate dictates that there can’t be much change without some disruption to what exists. It is my personal choice, that the disruption caused by these new coal & gas projects will greatly outweigh any short-term economic effects. We are voting to an end of tragic short term and narrow-minded thinking for the benefit of what we care about. This is what we are voicing by taking the steps below and in turning up to Divestment day on 18th October. For me, being considerate of the implications of what we are doing means taking Step 1 below first, putting the bank on notice and getting ready now before acting by actually moving our money together on 18th October. What we need is an assurance that no FURTHER investment in coal and gas operations are funded and we are giving them the opportunity to make that assurance before holding them to it. It may be your personal choice that you wish to change banks anyway.

 

Even if your savings may seem like a drop in the ocean of the budgets of corporations, the effect of your action will emanate out when multiplied across the people. If we then let out voices known to universities and local government, it could be hugely leveraged through the institutions that follow suit. We can then look forward to some much more positive tipping points as these huge balances are threatened to be moved. Both Sydney & Standford Universities recently made this pledge.

 

What About The Financial Return On Investments In Green Tech?

The purpose of this article, as with the Market Forces Campaign, is not to offer financial advice in any way. However, many prominent economists have alerted to the madness of the pursuits of our current government:

Nicholas Stern (London School of Economics) and James Leaton (Carbon Tracker) both point to China as evidence that carbon cuts are likely to be delivered. China’s leaders have said its coal use will peak in the next five years (according to 2013 article), said Leaton. The US and Australia were banking on selling coal to China but that this doesn’t add up [x].

Speculators in the markets may argue that the idea of investment in a ‘green’ company is subject to risks also. This is obviously true as no investment is fail-safe. Any company is subject to risks and we can only go on what we know and predict when investments are made.

Why then would investment in coal, which has massive risk of loss to its assets (when it is deemed that they can no longer be mined), be a wise choice? The science dictates that this will be the case and will be eventually forced into the overarching political agenda at some point v [xi].  An investor who enters into these deals is undeniably playing Russian roulette with your money if they claim to know when they should get off the train before everyone else[xii] [xiii].

Governments have huge capabilities to drive this change with the removal of subsidies, as demonstrated by the International Energy Agency in their 2013 report; 15% of global CO2 emissions receive an incentive of $110 per tonne in the form of fossil-fuel subsidies while only 8% are subject to a carbon price.”iii  For now though, it is left to us to speak through our actions, draw on any resources we have and attempt to restore Australia as a progressive nation. Where governments fail, people prevail!

Use the steps below to get ready for October 18th and then join your friends to tell the banks how you feel.

What do I do?

STEP 1 (~2 mins)   Check If Your Bank Funds Dirty Coal & Gas. see here

STEP 2 (~2mins)   Put Your Bank On Notice

STEP 3 (~1hour +)  Take action, Review Switching Banks Material choose your new bank & join Divestment Day on 18th Oct. see marketforces here  and  350.org here

STEP 4 (~2mins) Thank your new bank, tell them why you joined. see here

 

Also, don’t forget to:

•  Sign up to the Market Forces Newsletter to keep informed.

•  Share the information far and wide through Facebook & Twitter links, or  using this great Go Fossil Free infographic from 350.org

 

Tips For Switching Banks

•  Branch & ATM Availability; Consider keeping your old account open with a small amount of money so you can transfer into them if you are concerned about this with your chosen provider. You are still taking action by shifting the majority of money and payments for services. Many of the smaller banks use Redi ATMs

•  Fees; Review the fees and interest of the new banks carefully by going through the product description of the account you wish to offer. Allow time for this research. Pay particular attention to any charges for bank transfers & withdrawals to avoid any nasty surprises.

•  Direct Debits & Standing Orders; Many banks offer services for helping you set-up your regular payments (bills, rents etc) from your new account. You get a list of scheduled payments from your existing account or check previous statements (recommend 4 months) to make sure you have them covered. This saves headaches down the line.

•  Don’t forget to switch over your details with Medicare.

 

Superannuation Funds:

Market Forces have been busily mining stock market information to reveal what our supers are up to.

Jaydon - happy walking the talk.
Jaydon – happy walking the talk.

I personally had great experience with Australian Ethical who were are able to search for your active supers and coordinate the transfer for you free of charge. All after completion of a simple rollover form.

A great, easy way to ensure your super is placing the right bet for you to benefit from it with an intact environment to enjoy!

Jaydon Inott, Sept 2014

 

 

References:

[i]Fossil Fuel Free Report by Ionergan Research for 350.org. May2014 Link to PDF

[ii] Market Forces Interactive Map; http://www.marketforces.org.au/banks/map/

[iii]International Energy Agency, 2013, “Redrawing the Energy-Climate Map”,

http://www.worldenergyoutlook.org/media/ weowebsite/2013/energyclimatemap/ RedrawingEnergyClimateMap.pdf

[iv]It’s time to stop investing in the fossil fuel industry, Bill Mckibben, 30May2013 Article Link

[v]International Panel On Climate Change, 5th Assessment Report 2014.

[vi]Climate Change and Biodiversity Loss, Harvard University School of Public Health, Article Link

[vii]Peak Nature, Stephanie Mills, Post Carbon Institute 2010

[viii] Do Divestment Campains Work, Eric Hendley, Harvard School of Politics.

[ix] A critique of the Coal Divestment Campaign, Sinclair Davidson for Mineral Council of Australia.

[x] Carbon Bubble Financial Crash Crisis, The Guardian 19Apr2013: Link

[xi]The Economist (May 4, 2013). Unburnable Fuel: Either Governments Are Not Serious About Climate Change or Fossil Fuel Firms Are Overvalued.

[xii]Parkinson, G. (September 12, 2013). Fossil Fuels: Sell Now or Wait for the Stampede? Renew Economy.

[xiii]Douglass, E. (October 24, 2013). Wall Street Demands Answers From Fossil Fuel Producers on “Unburnable Carbon”. Inside Climate News.

 

 

Leave a Reply