A 100 per cent ethical super fund that works toward renewable energy and efficiency in the future is a choice that progressive investors already have; a 100 per cent renewable energy fund is a welcome addition.
The future is about renewable energy and getting industry and consumers to a long-term sustainable energy mix as quickly as possible. It is what Australian Ethical believes in and so, I believe, do the majority of Australians.
With so many people and organisations wanting change in our energy production mix, the question is as much about the path to this outcome as the outcome itself.
I raise these points because Australian Ethical would like to respond to comments by Matthew Wright on August 14 in Climate Spectator on our approach to energy. Wright suggested that Australian Ethical “…has committed to a gas future” in its investments. This is plainly not true.
Australian Ethical is committed to arriving at a 100 per cent clean energy world as quickly as possible and to get there in a sensible and managed way. Conventional gas (not coal seam or shale) provides the best means to urgently transition off high pollutants such as coal and oil urgently and avoid catastrophic climate change without imposing further problems on society such as energy shortages.
However, as we know on current trends we are heading for unacceptable levels of global warming and it remains a question as to whether transitioning from coal to gas will see us arrive at an acceptable end point. Ultimately, we need to plan for the transition from gas to renewable energy and we should never lose sight of this.
With this philosophy in mind Australian Ethical is not invested in coal or oil as would be expected. We are not invested in gas production other than an immaterial exposure via two Japanese utilities that have taken token equity stakes in projects to secure supply, but with no intent or ability to operate the asset. We do invest in support infrastructure such as pipelines and energy grids but our main focus is on positive solutions such as renewables and energy efficiency. Reducing demand for energy is as much a part of the solution as addressing supply issues.
So Wright’s assessment of our investment approach is plainly wrong.
These are challenging issues for the world to solve which require a balanced approach. The charter under which we invest has stood the test of time and takes a holistic approach, placing as much emphasis on securing human happiness and dignity as it does on environmental protection. Approaching the world’s issues with a single issue focus creates as many problems as it solves.
I applaud Wright’s enthusiasm for renewable energy and hope that there is room for a single issue fund to meet client demand. Our experience, however, is that our clients want a coherent and broad ethical approach to their investments – aiming for a better society overall while providing a competitive return on their investments.
Phillip Vernon is the managing director of Australian Ethical, an ethical superannuation fund.