Page 4249 - Week 10 - Wednesday, 22 September 2010
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Financial Management (Ethical Investment) Legislation Amendment Bill 2010
Exposure draft
MS HUNTER (Ginninderra—Parliamentary Convenor, ACT Greens) (10.21), by leave: I present the following papers:
Financial Management (Ethical Investment) Legislation Amendment Bill 2010—Exposure draft and explanatory statement—Papers.
Back in 1999, Ms Kerrie Tucker first raised this issue during the debate on the Financial Management Act. In 2002, the then Treasurer Mr Quinlan indicated that, indeed, the government would take ethical considerations into investment decisions, albeit solely in the context of risk and return. When the full scope of our investment portfolio was revealed in the Canberra Times, the issue gained further attention and some level of action was finally taken.
The ACT signed up to the principles of responsible investment and we do now have a framework for ESG considerations in relation to risk. We have recently had a review of our application of the PRIs in line with the parliamentary agreement. Whilst this has been progressed, it has been very slow and very limited. In fact, it is fair to say that nothing has actually changed as a result of our actions thus far. We are perhaps more aware of what we invest in, but we have not sold a single share as a result of the PRIs and there is no evidence that we are in any way targeting the portfolio towards positive social and environmental outcomes. We have taken the symbolic step. Now it is time to take a tangible step forward and actually implement some minimum standards for our investment practices.
Today I present an exposure draft of legislation that will make real change. A key part of what this legislation does is force us to think about what our money is doing, to question whether we think it is appropriate for us to profit from the listed companies in the bill or the listed practices in the bill. Business as usual is not okay. It is easy not to engage with the issue, to not think about where the money comes from or what it is doing.
We do have a large investment portfolio and it is important that we recognise the practical and symbolic effect that a change in investment decisions can have. A survey by the Business Council of Australia in the lead-up to this year’s federal election found that 85 per cent of people surveyed think that we can be more economically successful and more socially responsible. This is exactly the thinking driving the policy behind the bill. The ACT Treasury already operates an internal ethical screen so that it is aware of the types of activities that it is investing in. Unfortunately, it does not act on these issues.
Investing ethically is not new thinking. It has been on the international agenda for decades. All over the world there are billions and billions of dollars managed in an ethical and sustainable way. In fact, since 2007 over $1.2 trillion has been invested in positive environmental outcomes. It is now commonplace for superannuation
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