A disagreement between Local Government Super (LGS) and the trade union Depa over whether to invest in nuclear energy stocks has led to the replacement of the union’s director at the fund.
The decision by Depa follows the fund’s move to drop its screen on companies involved in nuclear power generation, while at the same time excluding companies with a material exposure to coal and tar sands mining, as well as coal-fired electricity generators.
The fund believes renewable energy will not be able to meet all the world’s energy needs in a lower carbon future.
The fund’s statement on the decision reads: “Nuclear energy is currently the only proven alternative to fossil fuels that provides base load power capacity, so outright exclusion of nuclear energy directly conflicts with our view on the importance of reducing our reliance on high carbon energy sources.”
LGS has given its fund managers the freedom to invest in 17 out of 50 companies involved in nuclear power production – the 17 companies are chosen for their use of modern technology and for having the highest safety standards. The LGS board approved the end to the nuclear screen in September.
Trade union Depa, which represents environmental health workers in New South Wales, and which nominates one member of the LGS board, takes the view that nuclear power is financially unviable given the cost over spends which have plagued recent nuclear power plant production, whilst the $112 billion clean-up cost for the Fukushima nuclear power plant highlights the enormous risks.
It believes these costs would be better spent on renewable energy innovation, such as the hoped for breakthrough of lithium battery technology capable of storing solar and wind energy. It also feels the decision by the fund will create reputational damage for no financial gain.
Ian Robertson, secretary of Depa and a former trustee of LGS who was a prime mover in establishing the screen on tobacco in 2000 and nuclear and uranium in 2002, says the decision to replace Joanna Davison as the union’s representative on the board with Sam Byrne, was due to a lack of confidence that she was aligned to the union’s stance on investing in companies involved in the production of energy from nuclear power.
Peter Lambert, chief executive of the fund, said the change was a pragmatic approach and that on balance the fund had seen more members congratulate tougher stance on fossil fuels than had criticised it for removing the nuclear screen.
On the change in the board, he commented: “We are sad to lose Joanna from the board, she was a very capable director, but we are fortunate to have such a well-credentialed replacement in Sam Byrne.”