Shaw James: Climate Change (Divestment from Fossil Fuels) Bill — First ReadingText is incorporated into the Bound VolumeShaw James: Climate Change (Divestment from Fossil Fuels) Bill — First Reading[Sitting date: 11 November 2015. Volume:710;Page:7927. Text is incorporated into the Bound Volume.]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.