ACC defends $1b bet on fossil fuels
ACC has defended its $1 billion investment in companies that produce and distribute fossil fuels, saying that divesting from them would not come under its ethical investment policy.
The state-owned accident insurer appeared before Parliament’s Education and Workforce Select Committee to defend its ethical investment policy.
Many large investment funds are selling their stake in firms connected with fossil fuels.
An article in the science journal Nature found that the vast majority of all discovered fossil fuels, including 82 per cent of all discovered coal reserves, must be left in the ground to keep warming to 2 degrees of preindustrial levels.
Green MP Chloe Swarbrick questioned why ACC’S ethical investment policy allowed it to invest in fossil fuel production, while banning investments in tobacco companies.
Appearing before the committee on Wednesday, Dame Paula Rebstock, ACC’S chair, said its policy on ethical investment meant it would not invest in firms ‘‘engaged in activities that are regarded as unethical by most New Zealanders’’.
She said ACC looked to ‘‘the laws of New Zealand to be the best reflection of those principles that are widely held by New Zealand public’’.
‘‘If New Zealand’s parliament did ban a product we would take it as the majority view of New Zealanders believing we should not invest,’’ she said.
An example of this was ACC banning investment in firms involved in the manufacture of automatic or semi-automatic weapons in April, following the Government’s decision to outlaw certain firearms.
Investments in certain kinds of weapons manufacturing, nuclear explosive devices, and other activities deemed illegal in New Zealand are also banned.
Tobacco is an exception. While tobacco is still legal in New Zealand, Rebstock said the fact its use was ‘‘greatly discouraged’’ by Government policy, and the fact that ACC was a significant player in the health sector, meant the fund was comfortable banning investment in that sector.
ACC banned investment in tobacco firms in 2006.
It also used polling of public opinion to ensure its investments are in line with what New Zealanders would find ethical.
ACC’S holdings in fossil fuel production and distribution is primarily in stocks and bonds of companies involved with fossil fuel production.
Including firms like Rio Tinto and Genesis Energy, whose main activities are not fossil fuel production, the investments make up 2.5 per cent of the insurer’s $40.4 billion portfolio.
It has a smaller investment in renewable energy, totalling $778 million.
As an independent Crown Entity, ACC’S investments cannot be dictated by the Government, however politicians have called into question whether the sizeable fossil fuel investment is consistent with its existing ethical investment policy.
While the Zero Carbon Bill, which is currently in select committee, would not ban fossil fuels, Swarbrick said its passage showed the majority of New Zealand wanted action on Climate Change.