Climate Change (Divestment from Fossil Fuels) Bill — First ReadingText is incorporated into the Bound VolumeClimate Change (Divestment from Fossil Fuels) Bill — First Reading[Sitting date: 11 November 2015. Volume:710;Page:7926. Text is incorporated into the Bound Volume.]Climate Change (Divestment from Fossil Fuels) BillFirst ReadingThe ASSISTANT SPEAKER (Lindsay Tisch): Is some member taking the call on behalf of James Shaw? I call Gareth Hughes.GARETH HUGHES (Green): I rise on behalf of Green Party co-leader James Shaw with his bill formerly in the name of—The ASSISTANT SPEAKER (Lindsay Tisch): No no. I am sorry the member must move the bill first. If you do not have that information maybe you might come to the Table here. You have to move that the Climate Change (Divestment from Fossil Fuels) Bill—someone might like to give you a copy.GARETH HUGHES (Green) on behalf of James Shaw (Co-Leader—Green): I move That the Climate Change (Divestment from Fossil Fuels) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. This bill is part of the Green Party’s priority climate-change campaign. We want to make sure that kids growing up in New Zealand and all around the world can have a safe and stable climate future but when we have the public’s investment assets dedicated to fossil fuels we are actually counterproductive. Globally there is $620 billion invested annually in subsidising fossil fuels. We see it in New Zealand with tax breaks direct subsidies and direct promotion benefits for the oil industry and for the fossil fuel industry. Globally there is a debate as to whether the climate charge through an emissions trading scheme or a levy should be $25 a tonne but according to the International Energy Agency the current global fossil fuel subsidies are the equivalent of a plus $100 charge.When we are debating this—particularly under the Government at the moment where we have a minuscule carbon price—$25 seems far away. But when you are already $100 behind—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry—Mr Shaw must leave the Chamber while someone else is speaking on his behalf.GARETH HUGHES: It is hard when you already have those global fossil fuel subsidies. When it comes to the public assets in our public ownership these belong to all New Zealanders through the Superannuation Fund. We have seen some phenomenal returns but when you look globally at the economic and financial analyses of sovereign wealth funds and of other investment funds there is a clear correlation between those investing in clean energy and green technology and their performance. They significantly outperform fossil fuel investments. We have seen this week the writing on the wall for the lowest coal use in modern history.Sitting suspended from 6 p.m. to 7.30 p.m.Mr DEPUTY SPEAKER: Kia ora mai tātou. Tēnā tātou katoa. Members when the House adjourned for the dinner break it was the first reading of the Climate Change (Divestment from Fossil Fuels) Bill. Gareth Hughes was speaking on behalf of James Shaw who has 7 minutes and 30 seconds remaining to speak should he wish to avail himself of the opportunity.JAMES SHAW (Co-Leader—Green): Tēnā koutou katoa. He mihi nui ki a koutou. I wish to pick up where my colleague Gareth Hughes left off in introducing this bill in my name. As he was saying we in this House share a deep ethical responsibility to act to protect the livelihoods of our children from the worst effects of climate pollution. One of the ways that we can help them is to divest from the companies that are at the forefront of destabilising our climate and polluting our atmosphere. In so doing we can also begin to invest in a clean low-carbon future attracting new businesses creating jobs and building a stronger future—divest and invest.Our publicly managed funds are the New Zealand Superannuation Fund the ACC fund and the Government Superannuation Fund and they are already regarded as some of the most ethical sovereign investment funds in the world. They have shown how to make good returns while maintaining some of the highest ethical standards in investment. The $28 billion New Zealand Superannuation Fund is the best-performing sovereign wealth fund in the world according to a global study by JP Morgan.Adrian Orr’s team has generated returns of more than 17 percent a year over the past 5 years easily beating all other sovereign wealth funds that publish their figures yet they have made these outstanding returns within a strong ethical framework that prevents them from investing in companies that manufacture nuclear weapons companies that harvest and process whale meat companies that manufacture tobacco products companies that manufacture cluster munitions and companies that mine destructively. Being ethical has clearly not compromised their ability to also be profitable.This bill sets out to extend the current exclusion list to those companies that now represent the biggest threat to our children’s future prosperity: those companies that are directly involved in the exploration mining and production of fossil fuels. Our bill would exclude around 200 publicly listed fossil fuel companies which are about 2 percent of our public funds’ current investment portfolios.Here is why: our atmosphere can afford to have only a quarter of these companies’ known fossil fuel reserves burned if we want to avoid runaway climate change. That means that at least three-quarters of all known fossil fuel reserves must stay in the ground—effectively becoming stranded—if we are to have a safe secure climate.This bill draws a line in the sand for fossil fuel investment and it will direct our public-fund managers to divest within 5 years. The 5-year time horizon empowers our fund managers to divest in a sensible and disciplined fashion. I expect that they will start with the highest-risk thermal coal companies which represent the biggest risk to climate stability and also to clean air and clean water.The New Zealand Superannuation Fund is already actively moving towards full carbon disclosure and reporting. But the ACC fund appears to have done little to acknowledge climate change and manage the significant investment risk it faces from its exposure to the carbon bubble. This bill will deliver greater consistency of risk management across our public funds. Capital freed up from divestment can flow into developing the clean energy alternatives that we need in order to prosper and to thrive. This is already happening. The Superannuation Fund’s commitment to invest $540 million in clean energy is its clearest signal yet that it is taking climate change seriously.Divestment is supported by the United Nations the World Bank and many of world’s major investment funds. Today around $67 billion in fossil fuel company stocks have been divested in 180 different organisations. Storebrand a $100 billion financial services group in Norway began divesting from coal and oil sands companies saying that these stocks will be “financially worthless” in the future. Storebrand’s announcement coincided with a decision by Rabobank one of the 30 largest financial institutions in the world to cease lending money to unconventional extraction projects involving shale gas and tar sands.In September 2014 the $860 million Rockefeller Brothers Fund announced plans to divest from all of its fossil fuel assets amounting to 7 percent of its total assets. Funds director Stephen Heintz said: “We are quite convinced that if [JD Rockefeller] were alive today as an astute businessman looking out to the future he would be moving out of fossil fuels and investing in clean renewable energy”. In Australia one of the biggest public sector pension funds the Local Government Super announced in October 2014 its intention to sell its holdings in coal companies saying that climate change is an unarguable scientific reality and posed a very real investment risk. This year the world’s largest sovereign wealth fund Norway’s $1.2 trillion Government Pension Fund Global began an orderly divestment from 114 companies on environmental and climate grounds. Interestingly the fund made no mention of ethical issues in its announcements. “Our risk-based approach”—they said—“means that we exit sectors and areas where we see elevated levels of risk to our investments in the long term.”The business world is moving on the climate but will this House? Finance Minister Bill English has publicly said that National would not support any intervention in the way that fund managers make investment decisions. The question then is what that means for the existing ethical exclusions that we have on tobacco nuclear weapons whaling and cluster munitions. I ask the members across this House who are not actively supporting this legislation whether it is socially responsible to invest in companies that are actively undermining our future. It is time for this House to do everything that we can to stop damage to our climate. Supporting this bill is one small but positive step in this direction. Thank you.DAVID BENNETT (National—Hamilton East): The National Party opposes this bill. The main reason is that—Chris Hipkins: Oh what a surprise! The party of no.DAVID BENNETT: You got a problem over there mate? Oh no the party of no. I will indulge in the Opposition for a little while. I think the first thing to indulge in is the Green Party. The Green Party has never been right when it comes to fossil fuels. I remember Green members used to stand in this House and talk about peak oil. Peak oil was the big thing the Green Party had. They said that oil would run out. That was the big thing for the Green Party 10 years ago. Look through any speech on that side of the House and they mention peak oil day after day.What has happened to the oil market? Tell us about peak oil now. Tell us about the Green Party and your amazing vision of how the oil market would work out. Tell us about the Green Party and your understanding of economics. Tell us about the Green Party and what actually happened in the oil market because oil has never been cheaper. Oil will never be cheaper. It will probably get cheaper in the future but it is at a very cheap point at this time because there is a plentiful supply of oil. There is no such thing as peak oil. The Greens were wrong. The Greens misled the New Zealand public and the world for many years talking about peak oil. When we look at the Greens they have never been right when it comes to cars transport and oil.I remember that we had the Road User Charges Amendment Bill in this House just a few years ago. I spoke on that bill and I said that this was a good bill for New Zealand and it was important that we support electric cars going forward. The Green members abused that speech. They said that electric cars had no future in New Zealand because they did not see them then becoming relevant in this country in the near future. The Green Party was wrong once again when it comes to transport fossil fuels and those kinds of issues. And we will wind you up—yes the speakers from the Green Party—because you have never been right in this area.How could we trust it then to pick the economic things that we should invest in for our superannuation funds? Why would we give the Green Party the ability to determine what New Zealand should invest in for the superannuation of our future citizens and for the ACC payments of our future citizens? Can we trust those people to make the right economic decisions on investments in those areas? They surely have not got it right with regard to oil in the past. They surely have not got it right with regard to electric cars in the past and they will never get it right because they are based on fundamentalist socialist economic policy that will never work and that socialism will never work because—Hon Member: Oh here we go.DAVID BENNETT: Here we come; yes that is true. I say to that party there: if you are right then come to this House but do not come to this House if you are completely wrong as you have been in the past in this area. It is important that we invest in the roads of New Zealand. It is important that we have electric cars. It is important that we have an economy going forward because there is no such thing as peak oil. There is no such thing as an oil market that is going to disintegrate.James Shaw: There’s no such thing as climate change.DAVID BENNETT: We are getting “climate change” from that member. That member is a new member of this House. I remember that when he became a co-leader of the Greens the first six or seven questions he asked in this House were all about the climate. Then the polls went down for the Green Party. When it lost 2 percent in the polls he went back to the economic policies of Russel Norman and attacked the rest of the country in other ways. We have not seen climate change questions from that member in this House recently have we? No he has given up on climate change. He has gone away from it because he knows he is losing in the polls. He is going away from the traditional things the Green Party should stand for. So it is pretty rich for the Green Party members to come to this House and talk about climate change tonight when they will not even ask questions in question time about climate change because they have given up on it. They know they cannot do what they want to do in the public eye.Carmel Sepuloni: I raise a point of order Mr Speaker. The member has been speaking for at least 5 minutes I think and he has not even touched on the content of the bill.Mr DEPUTY SPEAKER: Thank you for your point of order. I think you will find that there was a graceful brush with the bill early on but I take the member’s point and suggest to the member who has the call that he could get a little bit closer to the bill in his delivery and contribution.DAVID BENNETT: The bill basically says that the Green Party would make a direction to the ACC fund the New Zealand Superannuation Fund and the Government Superannuation Fund on where to invest. The Green Party has been shown to be incorrect in any of its potential determinations with regard to this area in the past and that is the point I am making. We cannot trust it to make investment decisions because it has always been wrong. It will always be wrong because it is guided by ideology rather than looking at what investments are in the best interests of New Zealanders going forward. That is something that we must be aware of and that is at the heart of why National will oppose this bill.Funds like the Superannuation Fund are independent bodies and the last thing we need is 10 members of the Green Party who have never done a day’s work in their lives making decisions about what New Zealanders should have their money invested in. That is the problem when you—Mr DEPUTY SPEAKER: The member is getting a bit repetitious. I suggest he find some new material or sit down.DAVID BENNETT: I would like to mention also that all the public funds that New Zealand has are in a responsible investing programme which is closely aligned with the United Nations principles for responsible investment which you would think the Green Partywould support—being a big supporter of the UN of course. There has been a long history of involvement in investment and things that are in the nature of climate change and risk in that area and so there is a responsibility now upon those investment vehicles to take into account these issues. There has been a long history of involvement with many of the organisations that are involved in that area. The independence of those funds cannot be compromised by a bill like this in this House.The Green Party has been wrong and always will be wrong in this area. We do not need to give the Green Party the power to make the wrong decisions when it comes to New Zealanders’ money. That is hard-earned money that New Zealanders need for their retirement and we cannot trust the Greens. We should never trust them and it is in the best interests of New Zealand that this bill does not pass. Thank you.Dr MEGAN WOODS (Labour—Wigram): It is my pleasure to take a call on the first reading of the Climate Change (Divestment from Fossil Fuels) Bill and signal that Labour will be supporting this bill’s referral to the select committee.There are important questions that we need to ask. Let us stop and rationally consider what we are talking about here unlike that last speech which I have to say was one of the most disturbing contributions in this House that I have heard. That was a speech from the chairperson of the Finance and Expenditure Committee a man who is charged with leading the select committee of this Parliament that examines the economic questions. That would have to go down as one of the most economically illiterate speeches I have heard.What I put back to the Government members of this House is that their Government has signed up to a 50 percent emissions reduction target by 2050. If this is not a plan for part of our way to reduce emissions then what is? What is the plan? This is why Labour is supporting this piece of legislation. We have very clear policy—we have to take climate change seriously. We have said that we are committed to a low-carbon economy and that we have to have requisite planning in place for us to get there. We think that this bill offers a really interesting way for us to examine whether or not this is the way for us to do it.Of course there will be questions we will ask at the select committee as we do with any piece of legislation like the hard-working diligent members of the committee we are. We will ask whether this is the way for us as Labour members to achieve a just transition. We will ask the questions around whether this is the right piece of legislation to help us achieve what we want to see and it is a goal that we share with the Greens. I would have liked to see that it is a goal we can share around this Parliament without it being caught up in the petty party politics that we have just heard from the previous Government speaker.We need to reduce our emissions. We have to take climate change seriously. At the moment our planet is on target for a 3 to 4 degree rise in temperature unless we as a global community do something about this. We are seeing climate change denial smirks all around the House—I can see that—but we need to do something. We are going to Paris in only a month and we as a country will have to show what part we are going to take in the world’s efforts to address this. New Zealand recently won a seat on the Security Council by saying we were going to take a leadership role in the Pacific. Well there is no greater leadership role that New Zealand needs to take for its Pacific neighbours than a leadership role on climate change. This is a real and present issue for our region for our country and for our neighbours. If we idly sit here and refuse to do anything such as the previous Government speaker was indicating we will end up exactly where this Government is and that is with no plan. The Government set targets. It failed to meet them. There is no planning no budgeting and no plan as to how we are going to cut emissions.I am fearful about the costs we are leaving to future generations. I want a Government member to explain this to me: if not this then how are we going to meet the 50 percent reduction by 2050 which the Government has signed up to? Where are the costs going to fall and how are we going to manage that over the next 50-year period unless we start taking action now? The contribution from that Government speaker seems to be the only solution we got. There was absolutely no alternative. It was just no no and no to this bill. But how is the target going to be achieved?There are good questions that need to be asked about this bill and Labour is happy to examine it at the select committee and take part in what I hope will be a very constructive conversation around how we can be planning for our future. Thank you.DAVID SEYMOUR (Leader—ACT): I rise on behalf of the ACT Party in opposition to the Climate Change (Divestment from Fossil Fuels) Bill.Stuart Nash: Do you want an economically illiterate speech?DAVID SEYMOUR: I am sure Mr Nash will get up at some point speak in favour of it and reflect on that as he flies home for the weekend. I want to thank James Shaw for bringing a substantial bill with noble intentions to the House but I have to say that I think it fails on a couple of measures. One is that he claims one of the advantages is that it is fiscally prudent for New Zealand investors not to invest in certain areas because they may end up with stranded assets. Now if it is true that James Shaw and the Green Party have that sort of foresight in respect of the financial markets I have got a simple solution for them: start shorting those assets. The Green Party could fund its entire campaign—it would not have to go and ask people for donations; it would not have to do fund-raising drives; it would not have to sell sausage sizzles or anything else; it could make all of its money just by shorting assets with the foresight that it used to design this bill. But of course we all know that that is hogwash. It has no such foresight as it has demonstrated with peak oil over the last decade.Secondly let us imagine for a moment that we are not going to delude ourselves that this is somehow fiscally prudent but rather we believe that this is a very important issue to address and ethically we—the nebulous “we” that the previous member Megan Woods kept talking about—must stop supplying capital or at least raise the cost of capital to these industries that we see as being a threat. The problem with that is that you have created a conflicting objective for those who manage the fund. On the one hand they have to maximise return to taxpayers for the purposes that taxpayers have and on the other hand they have to pursue this secondary ethical objective. It is never a good idea in politics in business and in life to have one organisation with two diametrically opposed objectives which is what they would have. It is far better to tax or disincentivise the consumption of carbon-heavy materials services or goods at the point of consumption.But of course the real difficulty is that all the 40000 people flying off in jet planes to Paris to talk about this next month will not be able to solve the fundamental coordination problem in that they cannot get every Government in the world to agree on a price level for carbon. Until you solve that problem nothing in this bill is going to help the security of New Zealand’s investments or have any significant or measurable impact on global carbon emissions. So with those few comments and caveats I again commend the member for bringing the bill but I cannot agree with its intentions or what its results will be and so I have to oppose this bill. Thank you.DENIS O’ROURKE (NZ First): New Zealand First agrees with the Green Party where it says that climate change is the most challenging issue of our time and that how we respond to it will define us and determine what kind of future we leave for our children. We also agree that there is an urgent need to transition our economy to a cleaner more sustainable future. We acknowledge this and that action on climate will require that we move away from the use of fossil fuels.We think that the most effective way of doing that to reduce the build-up of greenhouse gases in the atmosphere—primarily of course carbon dioxide and methane—is to progressively phase out the burning of fossil fuels and to move much more towards the use of renewable energy such as wind power photovoltaic electricity from sunshine geothermal energy and yes even more hydroelectric power. A progressive phase-out of fossil fuels is possible if New Zealand develops appropriate strategies and plans. We think that each citizen—even the ACT Party and some people in the National Party will be included—and each country has a duty and in fact a self-interest to work to this end to reduce the damage to our planet that we as a population are currently doing and which is not sustainable.Another consideration is that the major overseas economies that New Zealand trades with will increasingly require proof that our exports are produced sustainably. As a trading nation we cannot afford to sit on our hands in that respect. To do so would be to put our trade and our primary industries at risk. So with all that in mind New Zealand First’s policies oppose the use of direct economic instruments to achieve and move away from fossil fuels and that includes the emissions trading scheme. We think it is counter-productive to pay polluting companies large taxpayer subsidies with no requirements on them to actually reduce emissions. We also oppose the direct taxation of carbon.What we would do is develop those strategies plans legislation and the regulation to achieve the emissions performance that we all seek. We would do that in consultation with all New Zealanders and especially New Zealand business because without their cooperation we would have no chance of achieving emissions reduction objectives of any kind. We would make transport a first target and we would require much more use of rail for heavy freight and for urban passenger transport.New Zealand First has a comprehensive policy which we call “railways of national importance” as opposed to the roads of national significance promoted by National. We would actively encourage the use of hybrid and especially zero-emission vehicles including fully electric vehicles and very soon fuel cell vehicles that are beginning to come on the market as well. We would ensure better public transport including the large-scale introduction of light rail in the main population centres. We would provide local government with clear guidelines and information to assist in its planning functions to achieve a consistent standard throughout New Zealand.But this bill is highly prescriptive. In clause 7 it says “A fund manager must dispose of any investment that the fund has in the mining or production of fossil fuels.” and it has got to do it within 5 years. It imposes very onerous obligations on fund managers about identifying climate change implications and to measure manage report and so on.New Zealand First cannot support the bill for three reasons. New Zealand First will not support it because we do not agree with the imposition of unnecessary and effective costs taxes or impositions on any part of the New Zealand economy or New Zealanders. We do not support these sorts of cliff-face proposals which are seldom practical or effective. Instead as I have already said we would rather see a transitional approach with Government incentives and regulation where that is actually required.So we cannot support legislation of this kind. We do not believe that we should be paying the piper and playing the tune. It is over to those managers to decide how to invest and in fact that includes not just those considerations.ANDREW BAYLY (National—Hunua): It is a pleasure to be talking on the Climate Change (Divestment from Fossil Fuels) Bill because this is something that is really important to New Zealand—that we do deal with climate change in a responsible manner and of course we are. We have got a very good target that we are going to take to Paris in December next month.I think that everyone in this House will agree with the overall sort of general intent of what this bill is trying to achieve. However in my view it is totally misdirected. The first thing is why is this bill just focused on New Zealand Superannuation and ACC the Accident Compensation Corporation? I think of all the issues to be worried about and all the entities to be worried about they are perhaps two of the least worrisome entities that the Government has on its books.I think if the sponsor of this bill had actually picked up the phone and maybe rung Adrian Orr at the New Zealand Superannuation Fund as an example or even the investment team at ACC then they would have been absolutely horrified—Adrian would have been horrified at the thought of this bill—James Shaw: He was quite supportive actually when we spoke to him.ANDREW BAYLY: —because they are already applying a very strong ethical approach to way they invest in their investments around the world. I have actually spoken to Adrian about this bill very recently and I got a slightly different view which is that the New Zealand Superannuation Fund is very focused on achieving good outcomes and it is very focused on ethical investments and it is already applying some of the proper principles for investment.But why this bill is totally impractical is that it is an issue of how you define what the entities that should be precluded from being invested in are. There is a general sort of clause but for instance entities or investee companies that are using for instance a high use of coal—and a previous speaker was talking about transport—that is probably just as concerning as investing in certain other types of companies. How far do you stretch that definition? I have not seen anything in this bill that would go anywhere towards giving the clarity that the investees or the Guardians of New Zealand Superannuation as an example would be able to apply.The second thing is that the bill actually cuts across good governance and we have been debating in this House over the past few months about permitting the New Zealand Superannuation Fund to actually invest through funds. Actually there are four issues that we have been debating in this House but one of them is the ability and quite rightly so to be able to invest in funds and not only in New Zealand but offshore. They are a very standard fund-to-fund type of approach and here you are.By implementing this bill you would then start to preclude how the New Zealand Superannuation Fund can invest its money and of course it has got a very substantial portfolio. So it may be a very small part of a very large fund that would be therefore excluded or the New Zealand Superannuation Fund would be excluded from investing those types of funds.I just think that lack of practical application and that constraint on the New Zealand Superannuation Fund and ACC achieving their outcomes is so ill-defined in this bill that it would actually become quite meddlesome. And of course it raises significant issues for the Minister because no doubt that lack of clarity will require some issue of support from a Minister and that is a difficult issue. And on that basis I cannot support this bill.STUART NASH (Labour—Napier): As Megan Woods pointed out we are supporting this bill to the select committee. I would say that the last member to speak Andrew Bayly made some very good points and those points are that this could become quite confusing. But the reason why we are supporting this bill to the select committee is that the way Parliament tends to work is that we come up with these great ideas very good bills and we take them to the select committee. Then the experts come in and they nut out these difficult decisions—these troublesome points that the last member brought up—and if there are solutions to them which I have no doubt there are then we can incorporate them in the legislation.As Mr Shaw will tell you the form this bill is in at the moment does not necessarily have to be the final form that comes back to the House but I actually believe that we are beholden to members who put up members’ bills to actually take them to a select committee and get them tested by the absolute experts. And the experts will say to us “No this just isn’t practical because it won’t allow us to do that.” “Governance will be difficult to implement.” or “It may put us in a conflicting situation.” but until we actually know that all we are doing at the moment is making assumptions. So I actually think we should be sending this to a select committee and I would love to hear what the experts have to say.One of the reasons I am supporting this to the select committee is that there are a myriad of domestic and international investments at the moment that the Superannuation Fund or the ACC fund or any other fund have the ability to invest in. Like you I have immense respect for Adrian Orr and the Guardians of New Zealand Superannuation because they are extremely clever investors. They have proven themselves to be very very prudent and I am assuming that if we gave them direction from Parliament that there are certain investments that we consider as a country and as a Parliament to be unethical then they would say: “That’s fine.” They would remove that from their portfolio and they would go forward into other investments.But there are a couple of implications of this. The first is what does New Zealand stand for? This cuts into our global image. We have got to be seen to be walking the walk not just talking the talk. Mr Groser told us today in question time that we are going to Paris and we have done all this and we are going to save the world as Mr Shaw said. Well if that is the case let us go to Paris and let us tell the other countries that New Zealand believes that this is a real issue and in fact not only do we believe it but these are the actions we are taking. It is an easy thing to do in this case and this is why we should send this to the select committee. I must admit I do smile sometimes at the ACT member when he stands up and says: “This is a noble bill with noble intentions.” I say to him: then support it. Take it forward and again let us see what the experts have to say.I do not believe that it creates a conflicting objective in any way shape or form. In fact if we have a look at what our Superannuation Fund has done—let us just talk about the Superannuation Fund for a moment—the facts say that the superannuation fund instigated by the Kirk Government if it were still around would be worth about $242 billion in today’s money. Muldoon cut it—illegally as it turned out. It seems that this Government is making the same mistakes that the Muldoon Government made. It has cut contributions to the Superannuation Fund at a time when the Superannuation Fund is making extraordinary returns. What I would first love to see is in fact contributions to the Superannuation Fund started again and then let us have the argument around what constitutes ethical and unethical investment. Let us have the conversation about where we want to move as a country. Let us have a conversation as a Parliament but wider. Let us have a conversation in the general public about where we see our country perhaps in 2050 and how we get there what the objectives are that we want to achieve and what role the Government can actually play in achieving these objectives.One of the roles that we can play as a Parliament is representing the will of the people. I would not say that this is the most challenging issue. I think the most challenging issue is actually sustainable economic development and jobs—and throw into that inequality—but it is certainly a very important issue the issue around climate change. It has reached that tipping point where it is not just a bunch of—I was going to say greenies—environmentalists concerned about this. This is the wider community and we get it wherever we go. We get the question: “What are you doing about climate change?”. This bill is just one of the pieces in the jigsaw to address the conversation. I think we should have sent it to the select committee. I absolutely support sending it to the select committee because there are people there who are a lot more intelligent and a lot more competent than all of us here who would have provided answers to the questions we had. Unfortunately now that is not going to be tested unless the Nats vote for it. Thank you very much.TIM MACINDOE (National—Hamilton West): I must admit that I am surprised to hear Mr Nash supporting this bill because he is normally one member of the Labour Party who likes to see himself as one of its more commercially savvy members and what is important to note is that this bill actually cuts across what I would have thought to be a principle that he would believe in—that is the importance of the independence of fund managers in New Zealand.Let us be under no misapprehension. This particular bill which I think is a bizarre contribution from the Green Party would effectively ban public fund managers of the New Zealand Superannuation Fund the ACC fund and the Government Superannuation Fund from investing in companies that are directly involved in the mining and production of fossil fuels. Well we have always not only valued but also really upheld the importance of the independence of these publicly managed funds and I think that one of the really important things for us to take on board is that these particular managed funds are regarded as some of the models internationally. They are amongst the most ethical sovereign investment funds in the world at the moment and they have shown how to make good returns while maintaining these high ethical standards. These high ethical standards include a genuine respect for sustainability and best environmental practice.Here we have a bill that is effectively about the Green Party saying: “Let’s just secrete all the funds into our pet projects”—because that would actually be the end result of what it is wanting to do here tonight—“and take away the independence of some very experienced commercially astute fund managers.” Well I for one think that that is an outrageous suggestion. It would not serve the interests of our environment it certainly would not serve the interests of our economy and I cannot support this bill.RINO TIRIKATENE (Labour—Te Tai Tonga): Kia ora Mr Deputy Speaker. I am pleased to take a call in the first reading of this bill which we are supporting. I do endorse the remarks from my colleagues that this bill is worthy of consideration at a select committee and I do commend James Shaw for bringing this bill to the House.This ultimately comes down to what is ethical but also it is about responsible investment and it is about fiduciary duties: acting in the best interests of beneficiaries. The New Zealand Superannuation Fund which we have talked about quite a lot this evening is an absolutely outstanding performer and it actually operates within a responsible investment framework. The Superannuation Fund itself has been able to generate absolutely outstanding returns and it operates within this responsible framework that is aligned to international principles that are agreed across the investment fund industry worldwide. In fact the New Zealand Superannuation Fund is a signatory to the United Nations Principles for Responsible Investment.So we are seeing that responsible investment and environmental social and governance considerations are already central to a lot of the activities that the New Zealand Superannuation Fund and indeed ACC and others already undertake. So it is not actually a huge step forward to concede that we can include the ambit of this bill within the current activities of what the New Zealand Superannuation Fund does already. Case in point: the New Zealand Superannuation Fund has already laid out exclusions of particular companies and industries sectors that it will not invest in. The Superannuation Fund does not invest in tobacco companies. It does not invest in cluster munitions companies. It does not invest in nuclear arms and related types of companies. So those exclusions are already public; they are already part of the investment mandate and the investment imperatives by which that fund operates.So this bill definitely fits squarely within the current operations of the New Zealand Superannuation Fund and therefore it is not too far a stretch and should be given some proper consideration at select committee. We should get in the investment professionals. We should bring in those people who are involved in the management of institutional funds to present their views. As I see it the responsible investment framework is only evolving. It is getting bigger and bigger and it is expanding across the world. Obviously business and industries do not stand still. Things evolve; technologies develop; the world moves on. Therefore the investment sector has to be cognisant of that and ultimately we need to be aware of the well-being of our planet.Again that goes to the fiduciary role that these sovereign funds play and so I do commend this bill. I believe it is worthy of further consideration and I do hope that this House can indeed refer it to a select committee so we can get some very much informed contributions and submissions on the merits or not. Because ultimately the New Zealand Superannuation Fund is already operating responsibly. It is signed on to international conventions that are aligned to this bill and ultimately it is accountable to New Zealand law which we can change through this bill. Kia ora tātou.CHRIS BISHOP (National): In a previous contribution on a different bill I talked about the two types of members’ bills there are. There are the sorts of political bills out there—the bills that essentially exist to get the name of the bill into the parliamentary ballot. I think Jacinda Ardern’s proposed bill about child poverty eradication would fall into that category. No one is really opposed to eradicating child poverty—eradication and reduction I am sorry: the Child Poverty Reduction and Eradication Bill. No one is opposed to eradicating child poverty. In fact everyone in this House is all in favour of eradicating child poverty but of course that bill literally just sets up a commission to examine the issue. It is a bit like her bill to get the Law Commission to draft a bill to legalise gay adoption—you know the point of the bill is just to have the bill.So there are those sorts of bills and then there are the serious bills. The House on a members’ Wednesday does consider serious bills and I would classify the bill that the House has considered a few moments ago about solar energy the Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill as one of those serious bills. It was well-intentioned—I understand it was defeated at first reading but it was a serious bill to deal with quite an interesting issue in the electricity market.So how would I classify this bill? Well I would say it is more sort of a halfway house bill. It is quite a political bill and it is quite a simple bill. I have to say that James Shaw is a well-intentioned guy and I think the bill is well intentioned and it is a somewhat interesting issue that the House is dealing with.Mr Tirikatene just before made reference to fiduciary duties and trusts having to act in the best interests of beneficiaries. I am not sure that was wholly on point with the bill but I do agree with him that the purpose of the funds that the Government has—like the New Zealand Superannuation Fund and the ACC fund—must be to maximise returns for taxpayers and maximise returns for the people of New Zealand. I do agree with the comments of my colleague David Seymour about how if we were to pass this bill it would unnecessarily shackle the Guardians of New Zealand Superannuation with that very tricky dual mandate. It would make it difficult for them to discharge their responsibilities.The House only last month I think considered Government legislation to allow the Guardians of New Zealand Superannuation to use something called fund investment vehicles—or FIVs in investment parlance. That was a technical change to allow the guardians to use those vehicles to maximise returns for taxpayers. Everybody in the Parliament was at great pains to talk about the importance of the independence of the Superannuation Fund how wonderful the Cullen fund was and how Michael Cullen had the enormous foresight to set up this independent fund that would be at arm’s length from politicians.Hon Phil Goff: And all of those things are true.CHRIS BISHOP: Yes—Phil Goff says all those things are true. Well those things are true—that is exactly right. Michael Cullen also incidentally did not support the Government resuming contributions to the Superannuation Fund or he did not support the Government borrowing billions of dollars to put into the Superannuation Fund. In fact he explicitly said that when he legislated for it at the time which is contrary to Labour Party policy currently. They tend to go back and forth on that depending on who the leaderis and that changes about once a year. But anyway that is just a side point. The critical point is that everybody was at pains to talk about the independence of the fund and how it was important that politicians were at arm’s length from it and that is exactly right. That is exactly the point and that is exactly why this bill should be defeated. Thank you.Mr DEPUTY SPEAKER: I call James Shaw in reply.JAMES SHAW (Co-Leader—Green): I would like to start by responding to some of the criticisms of the bill that have been outlined with greater or lesser coherence by previous speakers. David Bennett started by saying a number of times that the Green Party was wrong about everything and that this bill requires that the Green Party decide where the Superannuation Fund and the other Government funds put their money. It does not; that is simply a lie. What it does do is that it says that—David Bennett: I raise a point of order Mr Speaker. That member is doing that on purpose to use that word and he should not be allowed to do that so I ask him to withdraw and apologise.Mr DEPUTY SPEAKER: The member makes the point that it is unparliamentary language to accuse—[Interruption] Sorry I am speaking. Do I need to stand up for the member to sit down? The member makes a valid point in his point of order. It is unparliamentary to accuse another member of lying. I am sure the member understands that; we will not hear it again.JAMES SHAW: It was a gross and intemperate error; I apologise and withdraw. What the bill does do is it requires the managers of those three Government funds to divest from the fossil fuel industry directly. A number of the Government speakers have said that we have been wrong about this but I would just like to point out again that the $100 million financial services group Storebrand has divested; that Rabobank that rather large Dutch-based global bank has ceased lending money to unconventional fossil fuel projects; that the $860 million Rockefeller Brothers Fund has divested; that Australia’s Local Government Super fund has divested; and that Norway’s $1.2 trillion Government investment fund has divested. So if you do not want to take my word for it take their word for it.Another of the criticisms was that this in some way disrupts the independence of the directors of the funds but I want to point out that we are actually already divesting from a number of categories. We do not invest any more in tobacco although I understand that some members of the House would be OK with it if we continued—or resumed sorry because we actually used to have those funds invested in tobacco but the fund has actually pulled back. It has actually divested from tobacco—the New Zealand Superannuation Fund divested from tobacco. It also is not investing in nuclear weapons. It is not investing in whale meat it is not investing in cluster munitions and it is not investing in companies that mine destructively.It does all of that and it still manages to make 17 percent returns. So when Tim Macindoe says that we have these ethical investment firms and that they get these great returns he is absolutely right. That was how I started my speech. If he had been listening he would have heard me start by acknowledging how they are incredibly ethical; globally recognised for doing so and at the same time world-beating. This legislation would not affect that; this would not affect that at all. In fact the other firms that have divested around the world actually have greater returns than the market average so again if you do not want to take it from me then just take it from those trillion-dollar funds around the world that have already divested.The thing is there is an ethical dimension to this. The ethical dimension is that New Zealand has committed to reducing our greenhouse gas emissions by 5 percent below 1990 levels. What has happened in fact is that our emissions have risen 23 percent since 1990. In fact in the lifetime of the current Government our emissions have increased 12.4 percent—they have gone up since 2008. We have no plan. We are standing completely in variance with our own commitments and one of the worst things that this Government has done is it has played fast and loose with New Zealand’s global brand over the last few years endangering the multi-billion dollar asset that is our “clean green” brand internationally.Today the National Party has had the chance to vote for the environment on two occasions one with the Climate Change (Divestment from Fossil Fuels) Bill and previously with Gareth Hughes’ “Fair Go For Solar Bill” and it has voted against the environment on both occasions putting a lie to its so-called blue-green credentials. But this is what we have come to expect from this Government and so I look forward to it voting against the environment once again tonight. Thank you.A party vote was called for on the question That the Climate Change (Divestment from Fossil Fuels) Bill be now read a first time.Ayes 48New Zealand Labour 32; Green Party 14; Māori Party 2.Noes 73New Zealand National 59; New Zealand First 12; ACT New Zealand 1; United Future 1.Motion not agreed to.