State-owned Kiwi investment funds financing climate change

New report shows over NZ $1 billion invested in fossil fuel industries

(Wellington, Thursday 15 August) More than one billion dollars invested for New Zealanders’ futures is supporting some of the world’s most polluting and environmentally destructive companies, a report released today by WWF-New Zealand reveals.

Fossil Fuel Finance in NZ: The Superannuation Fund and ACC shows how the two largest state-owned investment agencies have more than one billion of a total of 40 billion dollars of assets invested in the fossil fuel industry worldwide (1). With over three quarters of existing fossil fuel reserves needing to remain unburned to meet global climate commitments, the report sets out how this investment is both financially risky and ethically questionable.

Peter Hardstaff, WWF-New Zealand’s Head of Campaigns, says: “Over $1billion of New Zealanders’ pension and accident insurance money is invested in coal, oil and gas companies who’s on-going profitability depends on digging up and burning the un-burnable: fossil fuels that have to remain untouched if we are to avoid ever greater climate change.”

SuperFund’s direct holdings include Soco International PLC, which is currently the focus of a global WWF campaign to stop them prospecting for oil in Virunga National Park, Africa’s oldest and most biodiverse national park (2). Both SuperFund and ACC hold shares in Shell, which is under pressure for drilling in the Arctic; Anadarko, the Texan oil company with permits to drill in New Zealand’s deep waters, including the Pegasus Basin and the Great South Basin; and BP which was involved in the ‘Deepwater Horizon’ disaster off the Gulf of Mexico.

Investing in fossil fuels is increasingly being recognised by international ratings agencies as financially risky. UK analysts Carbon Tracker have documented how the finance industry is creating a ‘carbon bubble’ which is set to burst, causing significant loss of value to these companies (3).

Fossil fuel divestment is already taking place in a number of US cities and colleges, and last month a Norwegian Pension Fund announced its plans to divest from 19 fossil fuel companies (4).

Peter Hardstaff says: “The world is waking up to the threat posed to our economy and our environment from burning ever more carbon. This report shows how taxpayer’s money is being invested in coal, oil and gas but it also shows that the smart thing to do, both ethically and financially, is to start a transition away from fossil fuel finance. (5)

“We urge not only SuperFund and ACC but all NZ financial institutions to start divesting from fossil fuels, beginning with the most polluting such as coal and tar sands, and increase investments in clean energy. Our money should work to protect our future rather than threaten it further.”

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