La Trobe University has announced it will phase out its investments in listed companies with a strong involvement in fossil fuels.
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The university will move its investments away from the top 200 publicly-traded fossil fuel companies, making it the first university in Australia to do so.
The University Council said it had endorsed a plan to fully divest from fossil-fuel related company investments over the next five years and commit to greater transparency on the carbon footprint of companies held in its investment portfolio.
La Trobe University vice-chancellor John Dewar said the university was committed to getting the best possible return on its investments – while also being true to its commitment to sustainability.
“At La Trobe we believe economic profitability and environmental sustainability are not mutually exclusive,” professor Dewar said.
“We are committed to divesting from the top 200 publicly-traded fossil fuel companies ranked by the carbon content of their fossil fuel reserves within five years.
“In addition, we will disclose the carbon exposure of our investments and provide annual reports of our divestment progress over the next five years.
“We will do this with clear and realistic targets to achieve our desired return on investment of CPI plus four per cent per annum.”
Chief financial officer Gary Seach said the university utilised pooled funds rather than self-managed funds as it had a relatively small investment portfolio compared to other larger higher education institutions.
“While the size of our funds does not allow La Trobe to have an individual mandate over any particular stock held within that pool, we are working proactively with new investment manager to reduce the carbon exposure of our investments and to identify or develop funds to ensure full divestment from the top 200 fossil fuel companies over time,” Mr Seach said.
“There is a growing list of like-minded investors who want make sustainable investments and we look forward to working with them and pooling our funds to help deliver on our commitment to a triple bottom line.”
The university said the change came in response to suggestions by a group of student and staff passionate about reducing the impact of climate change and lobbied university leaders to change its investment strategy.
Fossil Free La Trobe and international environmental organization 350.org welcomed the university’s decision to move their investments away from the top 200 publicly-traded fossil fuel companies.
La Trobe University joins Swinburne University, Monash, the University of Sydney and the Australian National University in making a commitment to move their investment portfolios away from fossil fuels.
“We are thrilled that La Trobe will become the first university in Australia to totally divest from Fossil Fuels,” national campus divestment coordinator Ray Yoshida said.
“They have shown other universities that it is possible, and I look forward to other institutions following their lead.
“Universities have a very clear choice – do they keep funding dirty fossil fuels that drives climate change, or do they show true leadership, as La Trobe has done, and prove that there is an alternative.”
According to 350.org figures 518 institutions holding $3.4 trillion in investments are in the process of selling their shares in the top 200 coal, oil and gas companies.
In Australia, 22 local governments have committed to divest – six of them in Victoria.
Last month, neighbouring Mount Alexander Shire joined other local councils including City of Melbourne, Moreland City Council, City of Melbourne, Banyule City Council, Macedon Ranges Shire Council and City of Wodonga that preference investments to financial institutions that do not invest in or finance the fossil fuel industry.
Bendigo council to consider following suit
The City of Greater Bendigo’s current investment policy does not include a provision encouraging moving our investments away from coal, oil and gas.
Organisation support director Kerryn Ellis said the matter would be considered when the city’s investment policy was reviewed in December 2017.
“We are aware that other councils are including this in their policies, and is something the City of Greater Bendigo will consider when the current Investment Policy is next due for review,” Ms Ellis said.