Climate Change, Fossil Fuels and Your Super

The use of fossil fuels and their contribution to climate change can be a divisive topic, as we’ve seen during Australia’s recent unprecedented bushfires. While there are vocal people on both sides of this debate, the scientific community is becoming more and more concerned about the consequences of global warming, with many people now asking governments and institutions around the world to address this issue with greater urgency.

How are fossil fuels linked to climate change?

Fossil fuels such as coal, oil (petrol) and natural gas are formed over long periods of time from organic matter like plankton, plants and other life forms, which are buried under sand, sediment and rocks.*

Fossil fuels produce much of the energy that powers our cities, homes and lifestyles. However, our historic unrestricted use of fossil fuels has produced excessive greenhouse gas emissions, which has contributed to global warming, which is negatively affecting the diverse ecosystems on our planet.

The link between fossil fuels and climate change has been explained by the United Nations Intergovernmental Panel on Climate Change (IPCC)** as follows:

  • The concentration of greenhouse gases in the earth’s atmosphere is directly linked to the earth’s average global temperature.
  • The concentration has been rising steadily since the time of the Industrial Revolution, and average global temperatures have also been rising steadily.
  • Carbon dioxide is the most abundant greenhouse gas (accounting for about two-thirds of all greenhouse gases) and is largely the product of burning fossil fuels.

If we do not urgently address the issue of climate change, the IPCC has predicted that the most likely impacts will include:

  • Risk of death, injury, ill-health, or disrupted livelihoods in low-lying coastal zones and small islands, due to storm surges, coastal flooding, and sea-level rise.
  • Risk of severe ill-health and disrupted livelihoods for large urban populations due to inland flooding in some regions.
  • Systemic risks due to extreme weather events leading to breakdown of infrastructure networks and critical services such as electricity, water supply, health and emergency services.
  • Risk of mortality during periods of extreme heat, particularly for vulnerable urban populations and those working outdoors in urban or rural areas.
  • Risk of food insecurity and the breakdown of food systems linked to warming, drought, flooding, and precipitation variability and extremes, particularly for poorer populations in urban and rural settings.

If we continue to depend on fossil fuels as our main source of energy, scientists have predicted that global warming will continue.  Fortunately, alternative sources of energy are available.

What are the alternatives to fossil fuels?

The rapid development of technology means that alternative sources of energy are not only available, but are becoming increasingly common.  These alternatives are often collectively referred to as renewable energy or clean energy, because they produce very small amounts of greenhouse gas once operating, and can be used over and over again.

Solar, wind and water are examples of clean energy sources that the world has started to use.

  • Solar energy uses the heat of the sun to produce electricity.
  • Wind energy uses the power of the wind to turn turbines in order to produce electricity.
  • Hydro energy uses the power of water (usually rivers or tides) to generate electricity.

Does Christian Super invest in fossil fuels?

Christian Super considers care for creation and environmental stewardship as biblical principles of importance. We believe that climate change is both a material investment risk and a physical risk to people all around the world. We feel that we have a role to play in supporting the transition to a carbon‐neutral economy, through the investment choices that we make. For this reason, we aim to reduce investment into companies involved in activities that contribute to climate change and increase investment into companies which help to reduce the effects of climate change.

Here’s how we invest when it comes to fossil fuels and renewable alternatives:

  • Coal: Christian Super excludes companies with heavy involvement in the most carbon-intensive forms of fuel, including coal for energy (but not including metallurgical coal which is used for steel).  This includes thermal coal mining, as well as coal-based electricity generation. There are viable alternatives to coal-based electricity generation and therefore we exclude companies who continue to pollute the planet when it is unnecessary.
  • Oil: Christian Super excludes a number of the world’s largest oil producers, but does not exclude all oil companies.  There is a necessary transition from oil-based transport fuels for aviation, shipping and land transport to more sustainable fuels – oil companies are a necessary part of that transition. We exclude companies mining oil from oil sands and oil shale, as these are the most energy-intensive methods of obtaining oil.
  • Gas: We consider gas to be a necessary part of the solution as we transition to a low-carbon economy.
  • Renewables: we have made investments in renewable energy infrastructure all across the world, which you can read about in our Impact Report.

We determine that a company should be excluded because of their involvement in fossil fuels through the above activities, if more than 5% of their annual revenue comes from any of these activities. This prevents us from excluding companies that have incidental exposure to fossil fuels but are not significantly involved.

You can find out more about how climate change affects our approach to investing by reading the topical positions on our website.

The earth is God’s magnificent creation, entrusted to us to care and cultivate it in a responsible manner. The issue of climate change is complex; the solution even more so, but Christian Super is making sure that our members’ retirement savings are invested in creating positive changes for future generations.

*Source: Origin Australia website
**Source: Working Group II contribution to the Fifth Assessment Report of the IPCC

The IPCC was set up by the World Meteorological Organization (WMO) and United Nations Environment to provide an objective source of scientific information. In 2013 the IPCC provided more clarity about the role of human activities in climate change when it released its Fifth Assessment Report. It is categorical in its conclusion: climate change is real and human activities are the main cause.

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