Paul Bibby
Is Byron Council putting its money where its mouth is when it comes to reducing carbon emissions?
Council has proudly declared its intention to achieve net zero emissions from its operations by 2025, and has launched a series of projects in a bid to achieve that.
But a glance at the body’s $70 million investment portfolio raises questions about just how serious it is about saving the planet.
Put simply, a big chunk of Council’s cash is indirectly funding industries that are heavily reliant on fossil fuels.
The register of investments published in the agenda to this week’s meeting shows that Council has about $48 million invested with financial institutions that are, in turn, investing in fossil fuel-related industries.
That’s nearly 70 per cent of Council’s total investments.
This is despite the fact that the body has a policy of giving preference to financial institutions that invest in, or finance, environmentally and socially responsible investments.
Restricted by NSW Government
Council’s Manager of Finance, James Brickley, said it was impossible for Council not to invest with financial institutions exposed to fossil fuels, owing to conditions and restrictions imposed on it by the state government.
Under the Local Government Act and the NSW Government Minister’s Investment Order, Council was essentially only permitted to invest in large Author Deposit Institutions and was prohibited from investing in shares, he said.
‘In recent years, Council has [also] taken out low interest loans with the NSW Treasury Corporation to minimise borrowing costs as much as possible for infrastructure works,’ Mr Brickley said.
‘Access to these loans has come with a restriction… to ensure Council invests in higher quality credit rated institutions.’
‘Unfortunately financial institutions that promote no investment in fossil fuels are generally smaller financial institutions and have a lower quality credit rating.
‘This is limiting Council’s ability to invest in this area.’
Other Councils streak ahead
However, an analysis of the Ballina and Lismore Council’s investments shows that they are both well ahead of Byron Council when it comes to divesting from financial institutions that are exposed to fossil fuels.
Fifty-three per cent of Lismore’s investments have no connection to the fossil fuel industry, compared to Byron, which has 32 per cent.
Ballina is also ahead of Byron, with 40 per cent of its investments being non-fossil fuel aligned.
Lismore and Ballina have policies of environmentally and socially responsible investment, and both use stronger language than Byron’s policy.
Ballina’s policy, for instance, declares that the Council will make ‘every reasonable effort to maximise the percentage of the total portfolio held with non-fossil fuel aligned institutions’.
But Mr Brickley said it needed to be understood that Byron’s policy was not limited to fossil fuels.
‘Council has investments within its portfolio that are targeted toward social housing, environmental projects, climate action and gender equity as examples,’ he said.
‘Some of these are offered by financial institutions exposed to the fossil fuel industry.’
‘Council is also limited to investment offerings provided in the marketplace. Sometimes environmentally and socially responsible investment opportunities, when they come to the market, are so oversubscribed that Council may not receive an allocation’.
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