Australian Ethical has divested from Marsh and McLennan after concerns surrounding the firm’s insurance broking services provided to Indian conglomerate Adani’s Carmichael coal mine based in Central Queensland.
The divestment comes after a period of three to four months of engagement between the fund and the insurance firm.
Speaking to Super Review, Australian Ethical’s head of ethics research, Stuart Palmer, said the fund was deeply concerned on financial services companies that supported projects that were inconsistent with the Paris Climate Agreement and the fund’s ethical charter.
Palmer said its engagement process included identifying a concern, understanding what was happening, engaging with the firm, looking at what could be done to remedy the concern, and put in place measures so that the issue did not repeat.
“The Marsh group did make some changing in terms of introducing a public statement about its principles governing client engagements, including talking about circumstances where they might refuse to do certain types of work, its commitment to sustainable development goals, and climate change,” he said.
“It was positive to see them do that but for us it wasn’t good enough. We think it is no longer good enough for leading financial institutions like Marsh to be making general statements and principles without providing some of the detail to help investors and others, consumers, business partners to make some meaningful assessment on what that means in practice. Does this mean the group would not in the future accept engagements for projects like the Carmichael mine?
“Ultimately we assessed that the principles they announced weren’t sufficiently substantial to give us the comfort we were looking for and as a result we divested our shareholding in the group.”
Since June 2019, the fund has divested from 11 stocks for reasons labour and human rights concerns, high emissions products and buildings, and animal welfare considerations.
Palmer noted that one area that the fund had been looking at was action around mainstream media and social media on getting balanced news coverage and diversity across a broad range of entertainment and media the public consumed.
He said the fund had been engaging with firms like Nine Entertainment on issues such as having Pauline Hanson who up until recently was a regular spokesperson for the channel.
“We’re looking at what steps news organisations are taking to ensure that there is appropriate diversity and balance in voices in the commentary they provide,” he said.
“There are certain types of commentary that are not appropriate for news media platforms to provide – in the form of a breakfast show for example.
“We’re looking at how we think about that distinction between reporting a politician comments, which we think as an elected representative is important to have a voice, but distinguish that from providing them a regular spot. That is an important difference to understand and look at how responsible media organisations ought to be dealing with that.”