farmdoc's blog post number 45

Bell Bay, about 100km north-east of Mole Creek, is where Gunns Limited, Australia’s biggest logging company, with the connivance of the Tasmanian Government, plans to build a A$2b pulp mill. This project’s triple bottom line score is 0/3: at best and with massive public subsidies it will be marginally profitable; it will be environmentally disastrous (including adding 2% to Australia’s greenhouse gases); and it is deeply socially divisive. Last week Gunns’ long-term bank, the ANZ, facing an ongoing campaign of organised public opposition, announced it would not finance the mill. The ANZ’s decision, whether on financial, environmental or social grounds, surprised me. However sweetheart Vivienne, a wise woman, has long maintained that the response to global warming will be led by insurance companies – after their profits are eroded by more frequent and severe weather events – and, adjunctively, banks. The emerging evidence confirms her prescience. Last Monday I learned that Westpac – the only one of Australia’s four major banks whose shares we own – became the first Australian bank to sign the Equator Principles thereby agreeing not to fund projects that endanger communities or the environment, and the Global Compact CEO Water Mandate to tackle the emerging global water crisis. Why did Westpac sign these two documents? I don’t know. I don’t care. It has, and from now it is accountable.