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NSW/ACT Synod divestment implementation strategy 2013

In October 2013, the Synod Standing Committee approved the following implementation strategy, prepared by Synod’s Treasury and Investment Services (T&IS), for divestment from shares in companies engaged in the extraction of fossil fuels:

  • Instruct the managers to proceed with their divestment of all stocks that have a greater than 40% net exposure from direct fossil fuel extraction before 19th October 2014
  • Instruct the managers to proceed with their divestment of all stocks that have a greater than 25% net exposure from direct fossil fuel extraction before 19th October 2015
  • Instruct the managers to proceed with their divestment of all stocks that have a greater than 10% net exposure from direct fossil fuel extraction before 19th October 2016
  • Review the divestment strategy, particularly with respect to the issue of net versus gross exposure, prior to October 2015 to determine the practicality of further divestment in year 3.
  • Instruct the managers to reinvest complying with the Ethical principles and procedures
  • Due diligence on alternate managers to be completed  before 19th October 2014
  • Yearly review of the renewable strategy of each of the organizations (with consideration to research and development spend)
  • The Trustee is required to notify the unit holders of the decision and the divestment strategy in place
  • Notification of change to unit holders

Definitions:

% materiality: The Synod’s current ethical investment principles specify 5% revenue in the offending industry as the threshold for divestment from a company.  A % materiality approach is therefore taken for the fossil fuel divestment strategy.

Net revenue exposure: Net revenue exposure is calculated by subtracting the % revenue earned from renewables from the % revenue earned from fossil fuel extraction.

Intro: In October 2013, the Synod Standing Committee approved an implementation strategy for divestment from shares in companies engaged in the extraction of fossil fuels.