Climate change is the most challenging issue of our time. How we respond to it will define us and determine what kind of future we leave for our children. We all share a deep ethical responsibility to act to protect our livelihoods and the livelihoods of our children. And in doing so, we can transition our economy to a cleaner, more sustainable future.

Our publicly managed funds – the New Zealand Superannuation Fund, the ACC Fund, the Government Superannuation Fund and others – are widely regarded as some of the most ethical sovereign investment funds in the world. They have shown how to make good returns while maintaining some of the highest ethical standards in investment.

A series of studies have now established that only a quarter of known oil, gas, and coal reserves can be burned if rising temperatures are to be kept below 2.0°C. The burning of these already discovered fossil fuels will have catastrophic consequences for the climate and yet oil, gas, and coal producers continue to explore and mine for even more. Global action on the climate will require we leave most discovered fossil fuel reserves in the ground and stop the continued financing of further exploration and mining.

This Bill draws a line in the sand for fossil fuel investment and will direct public fund managers to divest from companies directly involved in the exploration, mining, and production of fossil fuels. These 200 or so companies make up only a small part of the government’s overall investments, yet their output represents the single biggest threat to our future. Divestment is supported by the UN, the World Bank, and many of the world’s major investment funds.

All companies are exposed to climate risks, so this Bill will also direct public fund managers to begin actively managing and reporting on those risks, requiring them to reduce their portfolio’s overall exposure to climate risks going forward.

Capital freed up from divestment can flow into developing the clean energy alternatives we need to prosper and thrive.