Divest Invest OPening Address
Tuesday, April 5 2016
Opening address of Australia's first Divest Invest conference by John Connor, CEO, The Climate Institute.
Welcome to this the first Australian Divest Invest Conference.
The organisers see this as not just one day. Rather this day and your involvement, are part of a continuum.
We want to build on the skills, experiences and networks that are the phenomenon of the divestment movement.
We also want to build on the skills, experiences and networks in the emergent “civil economy” movement, building an architecture of investor accountability and action.
Both are shifting capital away from fuelling more of our climate and pollution problems, towards accelerating solutions - towards greater investment in a safer, more innovative and more genuine prosperity.
This conference is the brainchild of Sue Mathews, and both the Mullum Trust and the Australian Environment Grantmakers Network, in which Sue plays a wonderful leadership role.
Today would not have been possible without the additional support of the Rockefeller Foundation, the international Divest Invest organisation, the English Family, McKinnon Family, Earth Welfare, Ross Knowles, Pace, Madden Sainsbury and Diversicon Foundations, as well as the Fairer Futures Fund.
Nor would today have been possible without Philanthropy Australia and the Sydney University’s United States Study Centre, who have brought out Stephen Heinz and helped spread the word. A number of industry associations and NGOs like 350.org have also helped us spread the word.
And it has been great to work with a steering committee of Sue Mathews, Louise O’Hallaran from AEGN and conference manager – slash - wrangler Rebecca Wright.
Thank you all. And thank you to the speakers and you, the participants, for coming.
Before I introduce the conference, I want to put up the only slide from me – you’ll get plenty of slides and numbers today – I have one slide, mostly about one number, a big fat round one. Zero.
This chart maps the growing annual levels of heat trapping carbon dioxide pollution that have come from the way we’ve used fossil fuels and the way we’ve used the land.
There’s now over 35 billion tonnes of CO2 being dumped into the atmosphere each year. Since the industrial revolution, a cumulative total of 1.5 trillion tonnes of CO2 have been dumped there, with just over half being absorbed in ocean and forest “sinks”.
The rest has stayed up there, and CO2 stays up for hundreds and hundreds of years, trapping more and more heat, pumping our weather systems with more and more steroids.
Experts have modelled thousands of future pollution scenarios and their implications, represented by the grey lines. But you need to focus just on the orange and red.
To keep global warming below 2 degrees above pre-industrial levels, it is clear we need to get to zero net emissions – emissions minus the sinks – by around 2050.
And then we need to continue on removing CO2 through natural, technological and industrial sinks.
But getting to zero must be our focus over just the next few decades.
In what should be a warning to those clinging to the status quo, this zero emissions objective has zoomed into the mainstream in the last 12 months. Our Prime Minister, Foreign Minister and Opposition leader repeated it around Paris and all nations endorsed it in the final agreement.
But getting serious about net zero emissions has a flip side – we have a very limited budget of heat trapping carbon pollution before we breach warming limits – we have to make it scarce. As this graph shows, if we are serious, we have to make pollution peak and plunge rapidly.
The Climate Institute is proud to have been asked to host this conference.
Our 2050 vision is of a resilient Australia prospering in a zero carbon global economy while fully and fairly participating in international climate solutions.
For over ten years now, our focus has been on national policy, international trends and on “following the money” in the investment community
From pioneering initiatives building climate related transparency and skills, with the now global Asset Owners Disclosure Project, to recent work led by Kate Mackenzie highlighting financial system risks and requirements for solutions, our work in this area has been:
In part, a hedge against the politics in a high carbon economy that perhaps all too predictably went toxic – and too much remains toxic and troubled.
Exhibit 2016 is the weekend’s approval of Adani coal mine in the Galilee, granted precisely as a vast trauma is being visited on the Great Barrier Reef. This literally leaves investment decision-makers as the last frontier against that mine’s climate madness.
Our work is in part a recognition that there are a number of channels that can drive climate solutions – policy development; capital investment shifts; technological innovation; consumer preferences and citizen action all have roles to play.
Some of those may surprise as more important than expected. Policy does not necessarily have to lead and, in high carbon political economies, may need to be dragged there by citizens, consumers and capital.
But our work is driven by the view that there is a symbiotic relationship between public and private investment policy.
While one might lead the other at various times, it is better that both are swiftly on song for the speedy and sustained transition we need. Investors must act, but Canberra must also act.
Today will focus predominantly on the burgeoning action and leadership, as well as the market disruption and chaos, underway in the private investment sphere. There’ll have to be more of each and today is about helping that!
As the PM might have said, and as we’ll explore today, we live in exciting times:
Firstly, In Paris all countries agreed to a framework that is not perfect but is historic in regularly ratcheting up accountability and action aimed at keeping warming, not just under 2˚C warming, but also in pursuit of avoiding 1.5˚C average warming.
Independent experts tell us that getting warming back under 1.5˚C by 2100 will require roughly the same scale of rapid reductions needed in the 20s, but faster reductions after that and even more carbon removal afterwards.
The Paris agreement provides unprecedented opportunities for other countries, citizens and investors to track national and international progress – opportunities we must maximise.
Secondly, at Paris, The Financial Stability Board of the G20 signaled their deep concerns about climate-related risks to financial system and economic stability by establishing a special Task Force led by Michael Bloomberg.
On Friday that taskforce issued its first report saying they will recommend disclosure frameworks not just for companies but also for investors and asset managers. This is creating a new level of expectations of disclosure, changing market information and conditions not just in those jurisdictions like France already making such disclosure mandatory.
This will mean more and more of your community’s investment strategies and risk assumptions will be made naked. With apologies to our international guests, in the words of Australian sports commentators, Roy and HG, there’s going to be a lot more nuding up – may not be pretty at first!
Thirdly, there has been a phenomenal escalation of activity from philanthropists, investors and NGOs as we lay down historic markers in the urgent quest to civilise if not democratise capital.
This task is urgent if we are to avoid the Tragedy of the Horizons highlighted by that radical greenie, the Governor of the Bank of England, Mark Carney. The extraordinary growth of the divestment movement, catapulting from 50 billion to 3.4 trillion dollars pledged divestment in just over 12 months, is a vital but not complete part of that.
And finally there has been a remarkable transition in the costs and innovations of the technologies that can make the goal of net zero emissions and below possible.
The stunning performance of the Tesla Model 3 launch is the latest, snazziest example of this. But as we will see wind and solar innovations have already been driving significant market disruption. In countries like Australia, the full potential of these climate innovations and solutions is being stymied by a system of cheap-to-operate, but aging and inefficient, power plants. We need a plan for an orderly and sustained transition to the excitement of clean energy innovation so necessary and so increasingly affordable.
But despite this excitement, we are also witnessing the confronting and challenging reality of global warming where annual global averages are already at or over one degree over pre-industrial levels.
Localised temperature differences have already been recorded at six, seven and more degrees above averages, highlighting that the need for action is now.
The roof of our world, the heat reflecting polar ice cap, has suffered the warmest winter on record and is at its lowest level ever. And summer is coming.
Our Fijian neighbours have just experienced some of the fastest winds ever faced by humanity. Extreme weather is smacking the poor and politically unstable regions in the Middle East, Africa and across Asia.
Overnight, a report from the London School of Economics has warned that global financial assets of $2.5 trillion, possibly as much as $24 trillion are at risk.
In Australia, this is also driving real and present impacts.
We can argue about our proportion of contribution to the problem with 1 to 2 per cent of global pollution, but our interests lie in the fact that almost all of the climate impacts are visited upon Australia.
Rising sea levels, extreme rainfall, record bushfire weather seasons, drought and ocean acidification - we get just about the lot. The epic fail that is the bleaching of our corals, just witnessed by our keynote speaker at Lizard Island, is another example of the real and present risks to our social, economic as well as environmental infrastructure - and to our way of life.
So there are reasons to be terrified and reasons to be optimistic.
Let us get on with how we can use our investments, our networks and our nous - to minimise the risks and maximise the opportunities.
We need to fight those putting our future at risk, but we must also build bridges to the future we want.
We have tried to design this conference to make it as interactive and engaging as possible and to advance the knowledge and networks within particular sectors of the investment community. Great contributions have already been made by philanthropists, churches, local government, universities as well as others in the broader investment community.
Let’s broaden and deepen those advances.