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Ethical investment won’t dent returns: CEO
Superannuation and investment firms limiting fossil fuel investments will not harm financial returns in the long term, according to some firm heads.
Financial services group Hunter Hall CEO David Deverall said if firms and funds continue on the path of “unabated production of fossil fuels”, it will be harmful in the long term.
“Our view is that the production of fossil fuels, as proven through endless scientific research has proven that there is a broader impact on society than what is currently being borne by the producers of those fossil fuels,” he said.
“What we’re doing is, by making the capital harder to come by for those companies, start to put an appropriate price on the activities that they’re involved in: namely the production of fossil fuels.”
Minerals Council chief Brendan Pearce recently said superannuation funds that limit fossil fuel investments are being side-tracked from their priority of providing maximum financial returns for members.
The comments came after AMP Capital announced it would scale back investment in thermal coal, coal-fired power generation, and certain types of oil.
A day later Hunter Hall announced it would end investment in fossil fuel companies.
But AMP head of environmental, social and governance research Ian Woods said the fund did not have high exposure to those sectors in the first place.
“When the time came there were only two companies we had to ask the underlying fund manager to divest from and that gave clients some real comfort,” he said.
Deverall said Hunter Hall would focus on other sectors instead such as biotechnology and technology companies, telecommunications, banking, and industrial companies.
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