Marrickville divestment not all it’s fracked up to be

Marrickville divestment not all it’s fracked up to be
Image: Source: flikr.com

By Mariana Podesta-Diverio

Marrickville Council has become the first council in NSW to divest in fossil fuel. In November they voted to take $15 million out of investments in unrenewable energy whenever possible.

Marrickville Greens Councillor and candidate for the seat of Summer Hill Max Phillips, who moved the divestment motion, said that divesting from fossil fuels investments sends a clear message to the banks and the financial institutions that are continuing to fund industries such as coal and coal seam gas mining.

“It sends a message to the banks that more and more people and communities are concerned about their investments in fossil fuels.” he said.

Clr Phillips also said that the divestment will shift some money but is also symbolic.

“There are going to be many more councils, organisations, and institutions that follow what we have done,” he said. “There’s a few institutions like Bendigo Bank, Adelaide Bank and Suncorp that don’t fund fossil fuels by choice.”

“If they’re offering a similar product and fit in the parameters council can invest in, they will get our business rather than our big banks.”

The divestment motion includes avoiding the four major banks (NAB, ANZ, Commonwealth, and Westpac) when council investment policy allows it, and moving to banks that do not invest in fossil fuels projects.

The move has been met with criticism from some, who are skeptical about the actual impact the motion will have on Council’s operations.

Marrickville Liberal Councillor Rosana Tyler, who voted against the motion, said that the motion specifies that divestment will only be possible if the investment is compliant with Council’s investment policy.

“The reason I voted against it was because when I read it, I just thought ‘you’ve got to be kidding me’,” she said. “We’re voting… to divest, but not divest. What’s the point of allowing the Greens to go to the press and say something which is not true? If you’re going to do something, you either do it, or you don’t.”

“What the other councillors approved was to provide preference to financial institutions who do not invest in the fossil fuel industry, but there are caveats,” Clr Tyler said. “The investment has to be compliant with [council] policy and it has to earn a rate of interest that is equivalent to or better than [current investments].”

“The way this has been written up in the press is ‘oh, we’re divesting!’,” Clr Tyler said. “But no, we are not. We have a policy, we are maintaining that policy, and if we can divest from fossil fuels we will, provided that we don’t earn less interest on these new non-fossil fuel investments than we are currently getting. ”

“In other words, unless that non fossil fuel investment is earning a greater rate of interest, we are not doing anything.” Clr Tyler said.

Spokesperson for climate change lobbying group 350.org Isaac Astill said the move was to have Marrickville Council joining councils from Australia round the world to become the first council in NSW to go fossil free.

“Local councils, just like universities and churches, are moral compasses within our communities,” Mr Astill said. “For them to also be a leading moral compass on how we can make sure our finances aren’t contributing to the fossil fuel industry is vitally important to the success of the movement.”

“There’s already a lot of energy and excitement in the Australian community for people to divest and go fossil free.” he said.

The City of Fremantle (WA) and the City of Moreland (VIC) both announced their divestment from fossil fuels in 2014.

Liberal candidate for the seat of Summer Hill and Ashfield Councillor Julie Passas said she supports anything that’s good for the environment as long as taxpayers don’t fork out more money and people don’t lose jobs.

“It’s really good to come out with [this motion],” Clr Passas said. “I have 25 nieces and nephews and I don’t want to leave a planet here for them where the [climate change] is going to affect them drastically.”

But Clr Passas said she doesn’t think the financial institutions would be very worried by any boycott.

“Most councils are broke,” Clr Passas said. “I can’t see all these financial institutions being too fussed if councils say ‘we are withdrawing our investments’.”

Clr Tyler said that when people retire from council they want to know that their retirement fund is the best it could be.

“If that means investing in fossil fuels, they’re probably going to say ‘I’d rather have a huge amount to retire on than a smaller amount because you councillors decided to divest from fossil fuels and it earned lesser interest’,” she said. “What do you think they’re going to say?”

“It’s a little cog in the big wheel that is the divestment campaign,” Clr Phillips said.

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