Fossil fuels divestment must be urgent priority in new investment framework

The Green Party welcomes the announcement of a new investment framework for Crown Financial Institutions (CFIs) and says the first order of business must be to divest from fossil fuels.

The Green Party has been working for years to persuade the Minister of Finance to instruct some of our largest public funds, like ACC, to divest from fossil fuels.

Because of this work the Minister has today made clear that every dollar CFIs invest on behalf of the public must be carbon neutral by 2050. This includes ACC, which currently has nearly $1 billion dollars invested in fossil fuels

“Crown Financial Institutions invest billions of dollars every year on behalf of New Zealanders, most of whom, I’m sure, want to know that investments being made on their behalf are not harming the planet their children and grandchildren will inherit from them,” says Green MP Chlöe Swarbrick, who led a 2019 briefing into ACC’s investments.

“When I raised ACC’s investment in the climate crisis back in 2019, the Minister of Finance told me that investment decisions are a matter for the board. I reminded the Minister that he had the power to direct alignment with the Government’s Zero Carbon ambitions through the Crown Entities Act.

“By choosing not to act at the time, Crown Entities like ACC have continued to plough millions of dollars into heating up the planet. We’re delighted that the Minister of Finance has decided to change course and made clear to that this course of action will not be tolerated.

“That said, while there is a lot to commend the new investment framework, it does fall short of explicitly requiring divestment from fossil fuels. Rather, it requires targets to be set to minimise the impact investments on the planet.

“There is not a single dollar invested in fossil fuels that is good for the planet, especially when you consider that this money is being invested on behalf of all New Zealanders, ostensibly for a brighter future. To limit global warming to 1.5 degrees, which is what the science says is the minimum necessary to avoid climate breakdown, then we simply have to leave most of the carbon we know about underground; it cannot be burned. And to stop it being burned, we have to stop investing in it being dragged out of the earth at all costs.

“When Crown Entity boards get together to discuss this new investment framework, their first order of business must be an urgent and rapid divestment from fossil fuels. Every dollar currently invested in warming the planet could instead go towards helping Aotearoa transition to a low carbon future that we can be proud to pass on to our kids and grandkids.

“I have a drafted Member’s Bill that will do exactly that, which Minister Robertson knows and is welcome to adopt as Government legislation at any time.”

“Because of the work of the Greens in Government, Crown Financial Institutions are already expected to report on their exposure to climate risk. We now need them to take this a step further and stop investing in making the risk worse.  

“The Greens will continue to shine a light on the activities of Crown Entities and work to ensure all public funds divest from the extraction and production of fossil fuels. The least that can be expected of us by future generations is that this Parliament stopped acting in a way that they know harmed their future.” says Chlöe Swarbrick.

ENDS

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