Wollongong City Council should move towards a policy of “responsible investment” but only if it can get as good a return as currently, staff have recommended.
There had been calls for the council to remove its investments from fossil fuel industries and invest in environmentally sound and socially responsible shares.
Finance staff have now recommended council adopt a responsible investment policy – with one major catch.
“Responsible” investments should only be chosen if they produce an equal or greater return than the alternatives, a staff report recommends.
Making matters harder is that councils’ investment choices are limited by a state government order that they only invest in either direct term deposits with banks, bank bills, government bonds, or TCorp, the NSW Treasury’s investment arm.
The difficulty here is that Australia’s major banks have been tied up in fossil fuel industry investment, and have their own ethical issues.
Wilderness Society Illawarra spokesman Brian Mason, who had led the calls for WCC ethical investment, said it was a “welcome step” but council should act soon – and tell the banks why.
“The big four banks in particular remain integrated with the polluting industries,” Mr Mason said.
“The Commonwealth Bank is a particular offender.
“Recent studies have shown that there is no substantial difference between the earnings of ethical investment portfolios and traditional investments. In fact we may now have hit a tipping point where the risk of having investments stranded in declining industries like thermal coal is a real problem.”