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Super Fund backs coal while the world rushes to dump it

The New Zealand Superannuation Fund has been increasing its investment in the world’s dirtiest coal companies over the last three years despite large declines in their value as the world dumps coal to save the climate, the Green Party said today.

New analysis from the Parliamentary Library shows that the Superannuation Fund (the Fund) has increased the value of its investments in the world’s twenty dirtiest† coal companies from $29 million at June 30, 2011 to $36 million at June 30, 2014. The Fund has increased its exposure to these companies while the average (unweighted) stock price of these companies has declined by 31 percent.

“While the world moves to get out of coal to save the climate, the Superannuation Fund is moving in the opposite direction, exposing the Fund to a greater investment in coal, even as the value of the shares declines,” said Green Party finance spokesperson Dr Russel Norman.

“Overall, the Fund made a return of 39 percent from June 2011 to June 2014, which was a great result for the people of New Zealand. But the Fund’s dirtiest coal company shares, on average, lost 31 percent of their value over this period. As the world finally moves on climate change, coal companies are in even more trouble.

“The Fund is not just investing in any old coal company; it has increased its investments in the twenty dirtiest coal companies in the world over the last three years, companies that are amongst the biggest individual contributors to climate change.

“The Fund currently has $140 million of coal investments in total – a tiny fraction of its total investments now valued at $29 billion – so getting out of coal would be painless for the Fund but hugely valuable for the planet.”

The Norwegian Parliament instructed its $1.2 trillion Government Pension Fund to sell its stakes in companies that generate more than 30 percent of their output or revenues from coal-related activities last week.

“Norway began divesting from coal companies earlier this year citing ‘elevated levels of risk to [their] investments in the long term’. They join a rapidly growing list of funds, banks, cities, universities, and churches that have divested from coal for ethical and financial reasons since 2011,” said Dr Norman.

“Money released from divestment can be reinvested in the rapidly growing renewable energy and energy efficiency sectors, helping to hasten the transition of our economy to a smart, low-carbon future.”

†As ranked by the Carbon Underground 200

Parliamentary Library analysis:

Note: Over this same time period, June 30, 2011 to June 30, 2014, the Dow Jones Coal Index has declined 66 percent while the Clean Tech Index has increased 40 percent.

Green Party divestment backgrounder:
Making money from a climate catastrophe: The case for divesting from fossil fuels