Eurobodalla Shire Council remains committed to increasing investment in fossil-fuel-free institutions, despite having to reduce its goal from 66 to 50 per cent.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
A motion to divest council investments in fossil fuel supporting financial institutions was approved last December.
The intent was to take action to combat climate change, by investing in institutions that were free from fossil fuel investments, where the interest rate was similar to other investments. A goal of 66 per cent was set earlier this year.
Carbon emissions through the use of fossil fuels are, according to scientific evidence, one of the key contributors to global warming and climate change.
The Investment Policy was amended and adopted by the council in March.
However, after a number of financial institutions across Australia had their credit ratings downgraded in May, the council had to re-evaluate the policy to manage risk.
After negotiations with the central borrowing authority for NSW, Treasury Corporation, an amendment to the policy was tabled at the May 22 council meeting to reduce divestment to 50 per cent of council’s portfolio.
The motion divided council. Councillor Maureen Nathan said she was not supportive of the original move to divest while Cr Anthony Mayne said the shift reflected a global change in attitudes.
“The world is changing in this space – New York City Council has just taken their money out of fossil-fuel banks,” Cr Mayne said.
Council’s corporate and commercial services director Anthony O’Reilly said the original policy was a low risk one, but it was also important to maintain a strong relationship with the Treasury Corporation.
“My professional opinion is the move is prudent – there is 1/10 of one per cent of a potential risk,” he said.
“However, Treasury Corporation explicitly said we would have issues with forwarding further borrowing if the original policy was in place.”
Cr Patrick McGinlay, who put the original motion, questioned why the council’s decisions should be influenced by an external corporation.
“Why is a corporation dictating to this council what its investment policy will be?” Cr McGinlay asked. “I think it smacks of making this council’s policies and deliberations a joke. I do thank Director O’Reilly for getting two banks over the line.”
Cr Phil Constable also questioned the influence of the Treasury Corporation: “Why are we changing our policy to facilitate their requirements?”
Mr O’Reilly said going against Treasury Corporation would mean higher costs for ratepayers.
“We get discounted lending rates based on our portfolio,” Mr O’Reilly said.
The amended policy is on exhibition until June 20.
