Fossil Free Melbourne University

Did you know that Melbourne University is investing in fossil fuels? By continuing to support this reckless industry, the University is profiting at the expense of its students and their futures.

It’s time for Melbourne University to show its true commitment to sustainability, and join the world movement towards a prosperous low-carbon economy. 

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What is divestment?

When you invest your money, you might buy stocks, bonds or other investments that generate income for you. Universities, as well as religious organisations, superannuation funds, and other institutions put billions in these same kinds of investments to generate income to help run their institutions.

Divestment is the opposite of an investment–it simply means getting rid of stocks, bonds or investment funds that are unethical or morally ambiguous. Fossil Fuel investments are a risk for investors and the planet–that’s why we’re calling on institutions to divest from these companies. There have been a handful of successful divestment campaigns in recent history, including Darfur, tobacco and others, but the largest and most impactful one came to a head around the issue of South African Apartheid. By the mid-1980s, 155 U.S campuses—including some of the most famous in the country—had divested from companies doing business in South Africa. Likewise 26 state governments, 22 counties, and 90 cities took their money from multinationals that did business in the country. In Australia, the University of Sydney joined in the movement to divest from the regime. The South African divestment campaign helped break the back of the Apartheid government, and usher in an era of democracy and equality.

What are we asking for?

We want the University of Melbourne to immediately freeze any new investment in fossil fuel companies, and divest from direct ownership and any commingled funds that include fossil fuel public equities within 5 years.

200 publicly-traded companies hold the vast majority of listed coal, oil and gas reserves. Those are the companies we’re asking our institutions to divest from.

Our demands to these companies are simple, because they reflect the stark truth of climate science:

  • They need to immediately stop exploring for new hydrocarbons.
  • They need to stop lobbying in Canberra and in state capitals across the country to preserve their subsidies and tax cuts.
  • Most importantly, they need to pledge to keep 80% of their current reserves underground forever.

Until these demands are met, we will be calling on our universities to show climate leadership and divest from these companies.

Why divestment? Shouldn’t we just focus on stopping fossil fuel projects like new coal mines, port expansions and coal seam gas wells?

Stopping fossil fuel infrastructure projects are important. Coal plants cause asthma and dump mercury into the air and water; fracking fluid can leak into groundwater and make people sick; port expansions in the Great Barrier Reef will cause huge amounts of damage, and so on. We can and should stand with people on the front lines of these fights to stop projects like the Abbot Point port expansion and Whitehaven’s Maules Creek Mine, that will destroy communities and the planet, and contribute to climate change.

But, we can’t stop global warming one port, coal plant or fracking well at a time–the numbers just don’t add up. At the same time that we’re working hard to stop these destructive projects, we need to loosen the grip that coal, oil and gas companies have on our government and financial markets, so that we have a chance of living on a planet that looks something like the one we live on now. It’s time to go right at the root of the problem–the fossil fuel companies themselves–and make sure they hear us in terms they might understand, like their share price.

What difference will one University make in the grand scheme of things?

By putting their money where their mouth is, large, well-known public institutions like the University of Melbourne can play a powerful role in eroding the social license that the industry currently has to freely pollute the planet.

From a financial perspective, while sale of shares might not have an immediate impact on a fossil fuel company, it starts to sow uncertainty about the viability of the fossil fuel industry’s business model. If, globally, all investors decreased their high-carbon investments and increased their low-carbon investments from the current average of 2% to just 5%, we’d leverage the tipping point of capital needed to solve climate change.

Isn’t it financially risky for the University of Melbourne to take its investments out of fossil fuels?

Respected authorities such as Lord Stern, HSBC, Citi, the International Energy Agency, Goldman Sachs, Mercer, the IMF and Australia’s own Climate Commission are warning us of the financial risks associated with investing in fossil fuel reserves that can never be burnt. Current valuation of fossil free stocks rests on extracting 5 x more carbon than can safely be burnt if we are to maintain a safe climate.

Report after report has shown that investing in clean energy, efficiency and other sustainable technologies can be even more profitable than fossil fuels. It’s a growing market, with over $260bn invested globally last year, and a safe place for your institution to invest (1).

Why fossil fuels are becoming risky assets:

  • Potential market crash due to over-valuation of carbon based assets
  • Renewable energy becoming more dominant and cheaper
  • Increased regulation creating less favourable environment for fossil fuel industry.

(1) http://www.reuters.com/article/2012/01/12/us-clean-tech-investment-idUSTRE80B1NX20120112

Is the University of Melbourne investing in fossil fuels?

Yes.

Melbourne University invests in 21 of the world's most polluting oil, coal and gas companies.

Just to recap, to invest can be defined as:
To put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.
To expend money with the expectation of achieving a profit or material result by putting it into financial schemes, shares, or property, or by using it to develop a commercial venture.

In 2013, the UMSU Environment Department submitted a Freedom of Information (FOI) Request to the University of Melbourne, requesting information about their investments in fossil fuel companies.

This information was provided in a private meeting between then-Director of Finance James Bolton, then-student Vicky Fysh and a supportive academic. Mr Bolton provided the information on a confidential basis and requested that the FOI be dropped. He suggested, however, that it was fine for us to state publicly that the University did invest in fossil fuel companies.

The University of Melbourne does not purchase shares in-house. Rather, they are purchased on behalf of the University via their external fund manager, the Victorian Funds Management Corporation (VFMC).

Often, when an institution or an individual invests via a fund manager, the shares are held in the name of the fund manager, rather than the investor. Other times, the shares are held in the name of the investor. Either way, the dividends (a certain amount of the company's profits distributed to shareholders) are paid to the investor. If this wasn't the case, there would be no reason for an institution like the University of Melbourne to have a fund manager in the first place!

The University stated the following in their 2013 Investment Report: The University is conscious of its responsibilities as a shareholder and actively asserts those responsibilities by voting at company meetings, via VFMC

It is unclear to us whether or not the University of Melbourne has shares in their name or in the name of the VFMC (this information is not publicly available).

The VFMC is an agency of the Government of Victoria. Unlike many other fund managers, it has strict rules around the parameters clients can put on their investment portfolios, meaning that even if the University of Melbourne asked the VFMC to exclude fossil fuels from their portfolio (for example), they would not necessarily be obliged to do so.

Anecdotally, the VFMC has been quite unwilling to engage with clients on the issue of fossil fuel investment, including being unwilling to provide a fossil free portfolio option. 

Many Australian universities invest with private fund managers or they purchase shares directly, giving them a higher degree of control over their investments.

To the best of our knowledge, although it may be inconvenient for the University to switch fund managers and move to a fund that does provide fossil free options, it is possible. We would not spend 2 years campaigning on this issue if this was not the case.

Can anyone get involved? Do I need certain skills?

Yes! Anyone can be involved!

Fossil Free Melbourne Uni is a grassroots organisation. This means that it is an ideal space to learn all kinds of campaigning skills. You don't need to 'earn' a position - we welcome and appreciate anyone who wants to contribute their time and energy. If you already have skills in a certain area, great! If you don't, but you're keen to learn, also great!

The best way to start is to come to our weekly meetings (alternating Mondays and Thursdays, 10:45am and 3:30pm respectively - check our facebook page for the current timetable). There, you can meet people and get a sense of how we work and what's happening. You have the option of joining a working group - there's Media & Communications, Grassroots, Grasstops and an arts collective - or you can help out with many tasks such as putting up posters, distributing flyers, chatting to people at stalls and the like. We have also just started a 'buddy' system, so you will have guaranteed support from an experienced FFMUer from the word go!

What are your links to 350.org?

350.org is an international climate justice organisation. They campaign at government policy level as well as on some frontline projects, and stage regular creative civil disobedience protests.  350.org groups operate autonomously in different countries, and have a much more 'grassroots' approach than many environmental not-for-profits.

Driving public and private divestment from fossil fuels is a key aspect of 350.org's work. Since universities are highly visible community leaders, 350.org Australia employs a Campus Divestment Co-ordinator to build a movement across tertiary institutions in this country. Fossil Free MU are part of the 'Fossil Free Universities' sub-project. We are provided with optional training and resources related to community campaigning, communication and so on by 350.org.  However, we operate totally autonomously. We organise, strategise and come up with all ideas ourselves.

To see how FFMU started, and our story up until now, see our interactive timeline.

What is the Sustainability Charter?

Conversation surrounding the Sustainability Charter formed the basis of much of our campaigning in 2016.

The Sustainability Charter is a document that sets out the University's commitments and obligations relating to environmental leadership. It is not an action plan, but a broad definition of the principles that will underpin the actions the University will take in the coming years to put sustainability at the core of all its teaching and operations.

As written on the Sustainable Campus webpage: "The Sustainability Charter is a framework for embedding social and environmental sustainability across all facets of University work. The Charter articulates a set of high-level principles and commitments that will be translated into priority actions through the Sustainability Plan."

The Charter was put together by the Sustainability Executive (a group of 13 academics, professional staff members and students). In order to develop the Charter, several expert University academic, financial and environmental boards, executives and committees were consulted. It also went through a public consultation period from October - December 2015, where the wider university community could have their say in what they wanted their sustainable university to look like. Over 50% of all submissions called for divestment from fossil fuels!

You can visit the official Charter webpage here.

The Sustainability Charter is distinct from the Sustainability Plan (but related). The Plan is essentially the commitments outlined in the Charter mapped onto real policies and action plans. "Metrics, targets and a reporting framework will be developed to ensure the intent and commitments of the Charter are fully realised and to provide transparency of progress." (Sustainable Campus, 2016).

But why is it important to FFMU?

We believe that there can be no true sustainability while the university still has its money propping up destructive and unethical fossil fuel projects. Divestment is a powerful way to send a message to this industry that these practices are not compatible with a sustainable planet or economy. Given the overwhelming response from the community urging UniMelb to divest, we need to continue to drive divestment into the Sustainability Plan!

What does 'CU200' mean?

The CU200 is the fancy way of referring to the world’s ‘top’ 100 oil, gas and coal companies. The ‘CU’ stands for ‘Carbon Underground,’ and the list of 200 companies is divided into two streams: the first 100 being oil and gas companies, and the second 100 being coal companies.

You will come across this acronym (the University loves acronyms) in things like the ‘Investments Forum Package,’ when the university is detailing exactly how many of these companies it has investment ties with.

The University of Melbourne has close relationships with 21 of the CU200, companies that we’ve dubbed the #ShunThe21.  These are:

AGL
Apache
BASF
BHP Billiton
Chevron
CNOOC
ExxonMobil
Inpex
Mitsubishi
Oil Search
Polish Oil & Gas
Rio Tinto
Royal Dutch Shell
Santos
Sasol
SM Energy
Statoil
Tata Power
Total
Whitehaven Coal
Woodside Petroleum

In addition, the University invests in another five fossil fuel-based companies that are not in the CU200:

Alcoa
Anglo American
NTPC
Tullow Oil
Westfarmers

What was Flood the Campus? Why did you camp out, get naked on Old Quad and block the Administration building for a day?

Flood the Campus  was a nationwide movement that took place at a number of University campuses around Australia. FTC was a movement championed by university communities who shared a desire for divestment and a need to escalate their tactics in order to achieve it. At this point, FFMU had been campaigning for divestment for 3 years and were being largely ignored by the key-decision makers that held the power to make divestment happen. Blocking the Administration building and the naked stunt were the first acts of civil disobedience that FFMU had done in the history of our campaign. They were thoughtfully planned out and created with the intention to call attention to our cause and show our University that we would no longer be playing by their rules. We aimed for our actions to be of as little disruption as possible to the University community at large (the vast majority of the student population support divestment; they are not the problem). We chose to block the administration building because it is the University administration that is blocking divestment, and they have ignored us for far too long. We chose to get naked on the Old Quad because we knew it would get heaps of media attention and heaps of people talking about divestment. We camped out to make our presence visible on campus and to create a space for discussions about climate activism within the University and beyond.

What did you achieve from Flood the Campus? Isn't civil disobedience likely to deter people from the campaign and give you a bad image?

Civil disobedience has the power to send a strong message and demonstrate the commitment of a community to their cause. When executed properly, civil disobedience can be an excellent tool for bringing people together to fight for a cause. FTC was a testament to just how many people on campus care deeply about climate change and want the uni to divest. During the week FFMU doubled our team of passionate and skilled-up students and alumni, making us more ready than ever to meet the next challenges in this journey towards climate justice.

As a direct result of blocking the administration building, we secured a meeting with Robert Johanson and Allan Tait, two key financial decision makers on the University Council. As a result of the naked stunt,  we had a mega media day with stories in the Age, the Australian, the Herald Sun, New Matilda, ABC News,the Daily Mall, and Channel 9 news. We trended on Facebook for a whole day.

Can individuals divest from fossil fuels too?

Yes! A great way to divest is to switch your bank and superannuation to more ethical companies.

BANKS:

Here are some banks with no current record of funding fossil fuels:

Bank Australia

"Bank Australia has not made and will not make any loans to the fossil fuel industry, including coal and coal seam gas. Bank Australia is also conscious of the impact of its own operations and has been carbon neutral since 2011."

Bendigo Bank

"In respect of our own carbon footprint we make conscious decisions to reduce and offset our impact and we help others do the same by offering green products and services. As we do not currently lend to projects in the coal and coal seam gas sectors, we are simply taking a pragmatic approach that says it makes no sense to broaden our footprint by starting to do so."

You can see where your bank stands and find more fossil free banks here.

SUPERANNUATION FUNDS:

According to Super Switch, the three super funds with the least amount of investments in the fossil fuel industry are:

1)   Future Super Balanced Growth (100% fossil free)

2)   Australian Ethical Balanced (97.37% fossil free)

3)   Good Super Balanced (94.69 fossil free)

 

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Fossil Free Melbourne University acknowledge that as an organisation we meet and work on the land of the Wurundjeri in the Kulin nations. We pay respect to their Elders past and present, and acknowledge the pivotal role that Aboriginal and Torres Strait Islander people continue to play within the Australian community.