A leading ethical superannuation fund has exited an $11 million investment in Lendlease over concerns that a planned residential development in southwestern Sydney will endanger the city’s largest Koala population.
Australian Ethical Investments has divested its debt and equity positions in Lendlease and retains an investment in the Lendlease-managed Australian Prime Property Fund, which is illiquid, but plans to exit when it is able to.
See our article on this issue published last year, The battle for Figtree Hill and the koala corridor.
The super fund has claimed the property giant failed to disclose “critical information” about the size of Koala corridors at the proposed second stage of the 3,300 dwelling Mount Gilead housing development near Campbelltown when plans were exhibited during a public consultation last December.
“We are calling for a fully transparent process where everyone can comment in particular on how the Chief Scientists’ recommendations have been implemented,” The fund’s Ethical Stewardship lead Amanda Richman said.
Australian Ethical has engaged with Lendlease for four years over Koala protection at the Mount Gilead site. Richman said the manager had become frustrated with recent interactions with the developer and the department, and said its engagement was no longer having a meaningful impact on biodiversity protection in the area.
“We think this issue is so critical that investors need to be prepared to walk away [if they do not believe their engagement is meaningful],” Richman said, adding that she believed the super fund’s role was now to educate other investors on the significance of the issue.
A Lendlease spokesperson said the proposed Koala corridors at Gilead, at an average width of at least 390m, meet the advice of the Chief Scientist. “Our $35 million investment into conservation at Gilead includes creating koala corridors that have been independently assessed as meeting the recommendations of the Chief Scientist in terms of width and connectivity.”
The developer also claimed the Mount Gilead site will increase core koala habitat by 70 hectares, a 30 per cent increase on its current size.
A DPE spokesperson said: “Transparency has and always will be an important part of our assessment processes, and claimed the public consultation process was transparent and that the draft proposal “met the advice of the Chief Scientist and Engineer” when it was exhibited in November and December last year.
A koala corridor map for the Gilead site were included in Lendlease’s planning proposal document, the spokesperson added.
The department will release a decision on the rezoning for the development in its final assessment report later this year.
Fund managers are increasingly using ESG (environment social and governance) filters to negatively screen their investments, however the focus is largely on climate change concerns such as greenhouse gas emissions from burning fossil fuels, and less on nature-based or biodiversity threats.
Australian Ethical previously divested its shareholding in Tassal in 2017 owing to concerns about the sustainability of its salmon-farming practices, which involves the use of wild-sourced anchovy fish stock. Richman said divestment decisions based on biodiversity factors were rare among Australian fund managers.
James Griffin’s office did not respond to a request for comment.
I have a small share holding in AEI and I would have hoped that they invested in the many technology areas that are presently starved of funding.