Divestment is primarily a moral issue – it’s wrong to profit from adding to climate change. However – there is growing and substantial evidence that being invested in fossil fuels is also a very poor investment decision.
The only divest-invest fund that we know of in South Africa is Nedbank’s Green Savings Bonds:
The Nedbank Green Savings Bond is a fixed term investment (18, 24, 36 or 60 months), offering great rates and capital security. In addition, it is the first savings bond in South Africa to offer consumers the opportunity to contribute towards the creation and development of the Green economy. It does this by earmarking the capital raised to finance renewable energy projects, at no risk or cost to investors.
Note that Nedbank does still have substantials links to coal. However, as of March 2015, this bank appears, in some respects, to be the most carbon-progressive option for South African savers. FFSA is not specifically endorsing Nedbank, but we offer this information for you to make your own best decisions for divestment-reinvestment.
Other ways to divest
Someone we know recently had to switch provident funds. She was keen to make sure that her new investments were consistent with her principles. But her financial adviser offered her a portfolio stuffed with carbon villains – Sasol, BHP Billiton, Anglo American – and to add insult to injury, British American Tobacco. ‘No,’ she said, ‘I don’t want to give my money to these people. Show me another option.’ He did. And her provident fund is now low-carbon (and tobacco free).
You can do this too. Write to the managers of your pension fund, either at UCT or elsewhere, asking them to divest from fossil fuels. Here’s a range of template letters you can use to write to your financial services provider. Please consider doing this, and then fill in our Support form to tell us about it. (Even better, get lots of your colleagues as co-signatories.)
• Please tell us about your experiences – we’d be very happy to have your feedback.
• If you find a sympathetic and helpful financial adviser, please let us know.
Write to your financial services provider
Template letter 1: If you’re a member of staff or faculty at UCT with pension benefits.
Template letter 2: Non-specific pension fund letter.
Template letter 3: Letter to financial advisor/investment house/bank
• The table below gives an indication of which SA funds are most and least invested in fossil fuels. So it might, for example, be worth enquiring about Foord Equity’s investment plans and the Investec Value fund.