Investment manager says no to plea for fossil fuel-free investment fund
Allan Gray says there are better ways to fight climate change
Investment giant Allan Gray has said no to pleas by activist group Fossil Free South Africa (FFSA), on behalf of more than 100 Allan Gray clients, to set up a fossil fuel-free investment fund.
In a letter addressed to Allan Gray, FFSA urged the company to create a âfossil-freeâ South African equity fund and divest from fossil-fuel companies âas soon as possibleâ. The letter is part of a campaign, launched in 2021, aimed at South Africaâs seven biggest investment managers.
âThis is not some whacky radical demand,â FFSA coordinator David Le Page said in a statement. âThe petition simply echoes the stance of the United Nations whose Secretary General, Antonio Guterres, has said: âI call on all financial actors to abandon fossil fuel finance and invest in renewable energy.â Weâre just asking Allan Gray to properly align itself with best international practice,â said Le Page.
Allan Grayâs Chief investment officer, Duncan Artus, said the establishment of a fossil-free fund was not the answer.
âClimate change is one of the biggest threats that faces society today ⌠We fully support the global transition to a more environmentally sustainable society. We also recognise the role we play in being part of the solution.
âWe do not believe the establishment of a fossil fuel-free fund, nor divestment, is the answer. We believe that the best approach is to use our active investment strategy to tackle climate change. We engage with management and boards of investee companies on climate risks and use our influence to push for positive change and to encourage better environmental decisions and disclosure,â Artus said.
He said the companyâs approach was outlined in a climate policy statement, available on its website. âWe report the progress we make on climate change-related engagements in our annual Stewardship Report.â
âDivestment from fossil-fuel companies is no panacea for climate change, but it is a vital tool in staving off deepening, unmanageable climate change at a time when every possible mitigation measure must be usedâ, said Le Page.
He said similar letters would be sent to Coronation Fund Managers, the Government Employees Pension Fund and the Public Investment Corporation, which manages the government employeesâ pension money, Old Mutual, Sanlam and Stanlib, as 90 or more clients of each company signed up in support.
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