[‘Drive from within’: AMP boss weighs into divestment debate]

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[‘drive-from-within’:-amp-boss-weighs-into-divestment-debate]

‘Drive from within’: AMP boss weighs into divestment debateSkip to sections navigationSkip to contentSkip to footerAMP chief executive Francesco De Ferrari has defended the right of major financial institutions to maintain investments in fossil fuel producers, despite rising pressure from clients to address climate change.”I have a very personal view, absolutely, that I think any process of change requires setting clarity of expectations and trying to drive it from within,” Mr De Ferrari said.”I would definitely opt for engagement and opt for divestment only as a conflict exists when you’re not happy with the progress of engagement.”AMP chief executive Franceso De Ferrari said institutional and retail clients are increasingly demanding clean investment options. Credit: Dominic LorrimerThe comments come after reports in The Age and The Sydney Morning Herald this week revealed some of the nation’s biggest industry super funds, which have trumpeted their green credentials, still have billions of dollars invested in fossil fuel producers.While many of the super funds said remaining invested allowed them to drive change from within, research obtained by this masthead also showed support for shareholder resolutions that would force companies to take tougher action on climate change had fallen.LoadingAMP remains one of the nation’s biggest superannuation fund managers, overseeing around $117 billion in 70 funds.Mr De Ferrari said the wealth giant made a number of decisions on where to invest clients’ money in relation to its environmental, social and governance (ESG) policy, and would divest only if engagement with these companies broke down.When asked if he thought coal and oil were viable long-term investments, Mr De Ferrari said: “There are a lot of investments out there that one can choose from and so I think there is ample opportunity to invest money in a whole varied range of industries and sectors globally.”LoadingTony Adams, head of sustainable investment research at financial consultancy firm Lonsec, said the “divestment movement” was gaining traction in Australia after global investor BlackRock announced it would divest from thermal coal. But he noted the two approaches of divestment and engagement can be pursued at the same time.”There’s no question there’s an increased appetite for divestment of particular types of assets. But engagement works well when you’ve got people divesting at the same time,” Mr Adams said.”The two models work well together.”Mr Adams said Lonsec is receiving calls every day from financial planners seeking advice on how to offer clients ESG options, adding there there is no such thing as a perfectly clean investment portfolio.”It’s complicated because we all use fossil fuels, we all have carbon footprints in just about everything we do. It’s difficult to figure out where to draw the lines,” Mr Adams said.Lonsec is developing a tool for advisers that scores companies from one to 10 on a metric of ESG impacts in a space he said has become too complicated.”It’s important to do this in a simple, easy-to-digest manner. Rather than stats and data about carbon footprints that can get very complex,” Mr Adams said.”It’s widely accepted that we’re going to have to stop burning coal and that coal is going to become a stranded asset. The speed at which that occurs is still unknown.”Most Viewed in BusinessLoading

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