KIERAN FINNANE reports.
The Town Council should take a look at divesting from the Big Four banks for environmental and ethical reasons, says Councillor Jade Kundrenko (at left). They should do no such thing, counters Cr Eli Melky, as only the Big Four are underpinned by the Federal Government in times of crisis.
Cr Kudrenko raised the issue at last night’s council committee meeting. She noted council’s short-term investment of $25 million, split between NAB and Westpac, both Triple A rated. Council’s policy requires a minimum of 15% to be invested with major banks, while allowing a maximum of 45% to go to regional banks, and a maximum 45% to credit unions or similar.
At present 100% of invetsments are with the two majors.
Cr Kudrenko’s concern is that the Big Four “are contributing huge lending to the fossil fuels industry”, while council’s business plan and strategic goals are clear: “We embrace sustainable and alternative energy sources.”
Cr Kudrenko says other councils and major organisations in Australia have divested or are considering doing so.
The City of Fremantle was the first Australian local government to divest. Its investment policy “gives clear directions not to place council funds into banks or financial institutions that support fossil fuel industries, unless there is no alternative”. This move followed a “groundswell of institutions across the globe start to divest from carbon”.
Finance director Paul Della says the current process is that when council’s investments are due for reinvestment, the opportunity is put out to tender. The institution offering the best interest rate that fits into council policy gets the money. He is not aware of any criteria around council’s environmental and ethical responsibilities in terms of investment and suggested it would be an issue for councillors to look at in a forum (not open to the public).
Cr Kudrenko recognises that making money from council’s investments is “very important to our community’s future” but asked Mr Della to bring to council more information on alternatives to the big banks, “specifically looking at investment opportunities than can guarantee more environmentally sustainable projects”.
Cr Melky (at right) signalled that he would “never support anyone other than the Big Four”.
“In the Global Financial Crisis the Big Four were underpinned by government. If you invest the town’s money into anything different and something happens like a global crisis we are doomed. I don’t know that the town would very impressed with us if we risked their money [albeit] for a good environmental strategy,” he said.
KIERAN FINNANE reports.