​Sydney Uni joins the mining divestment race

The University of Sydney has joined ANU and the University of Maine by divesting stocks to become more environmentally sustainable.

It has announced it will work towards reducing the carbon footprint of its listed share portfolio over the next three years, however this does not include a wholesale exit from fossil fuels.

“The decision follows a comprehensive review taking into account leading practice on sensitive investments, and the current global views and actions surrounding fossil fuel investments,” the University said in an official announcement.

The review included examining whether it should divest entirely from the fossil fuels industry.

This review “also highlighted the complexities of reducing an investment portfolio's carbon footprint. For example, divesting entirely from all companies with an interest in fossil fuels could result in divesting from companies that are also committed to building renewable energy sources. In addition, there are many companies that do not produce fossil fuels who are nonetheless heavy emitters,” the University of Sydney said.

“Instead of targeting specific sectors, the University decided to take an innovative, whole-of-portfolio approach which looks beyond fossil fuels to reduce the carbon footprint of its share investments. It believes setting a target for reducing greenhouse gas emissions across the portfolio will effectively and meaningfully impact on efforts to reduce emissions.

It is working with its equity fund managers to build a portfolio of investments that allows it to reduce its carbon footprint by a fifth in a relatively short time.

The University’s vice-principal (operations) Sara Watts added: "The new strategy balances the University's obligation to manage funds wisely on behalf of our students, staff, donors and alumni with its desire to address climate change and protect Australia's heritage.”

"This strategy will give the University a legitimate voice in the conversation on how organisations can best address climate change risks. The University's strategy signals to the entire market that investors are concerned about the impact of climate change and expect contributing sectors to respond with plans to reduce their emissions."

The announcement was welcomed by Fossil Free USYD, which then called on the University to completely exit fossil fuels.

“Sydney University has taken a great step forward,” Fossil Free USYD spokesperson Clodagh Schofield stated.

“By starting to take responsibility for the carbon we put in the atmosphere, the University has shown leadership in managing climate investment risks that should already be a standard industry wide,” she said.

“However, Sydney University should aim higher than standard. It’s five minutes to midnight on climate change, and we live in a country that has no viable policies to address this issue, and no plans on how to create a just transition to a viable, renewable economy.”

When asked why it is not looking to divest completely from coal as well as to hitting the 20 per cent target, the University stated that “divesting is a blunt instrument which delivers sub-optimal outcomes for all parties concerned,” reiterating that “some fossil fuel producers are also investing heavily in renewable energy sources and therefore divesting from them would not help the uptake of low carbon sources of energy”.

“This strategy is about getting the balance between financial and environmental responsibilities right, while also making investment in clean energy a better economic proposition.”

The University of Maine last month announced a decision to completely divest its stakes in coal mining companies.

The university released a statement which said the decision was made based on “potential costs of climate change, the steady decline of coal as a non-renewable resource and the emergence of new green technologies”.

The university also said it would consider divestment from fossil fuels across the board.

Fellow Australian educational facility ANU last year carried out a divestment plan, stating its intention to exit from fossil fuels.

However questions arose as to the criteria of many of those companies chosen for divestment.

At the time ANU vice chancellor Ian Young, who has since announced his retirement, stated that "[ANU] should not invest in companies that cause social harm," adding that the companies in question were "not socially responsible and doing harm".

The achievement of persuading the ANU to divest from companies that profit from fossil fuel was regarded as a great success by the student collective Fossil Free ANU (FFANU), however of the companies divested only two fell into that category: Santos and Oil Search.

Since that time ANU has received a significant backlash, as has the consultancy firm – CAER- upon whose research ANU’s ‘socially harmful’ divestment decision was based.

The CEO of one of the companies named, Sandfire Resources,said he was unsuccessful in seeking a formal retraction of press releases issued by CAER on the 19th and 20th of October, which were purported to misrepresent the research methodology followed by CAER in preparing corporate profiles for the ANU.

However,Australian Miningunderstands that the press releases in question did not refer to Sandfire, and that CAER removed them shortly after Sandfire raised their concerns.

In the face of this legal action has been undertaken by Sandfire against CAER.

In USYD’s more measured approach to its divestment decision, which will be reviewed annually, it appears to have learnt from the handling of ANU’s choice to divest last year.

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