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The ClimateInstitute

The Accidental Investor

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www.areyouthevitalfew.org

“In what has been described as the democratisation of global capital, the largest pool of available investment capital is the around $60 trillion supposedly managed for the long term by the world’s retirement, insurance and sovereign wealth funds...Shifting even a small percentage of these funds can make a significant impact in tackling climate change and - as proper long term risk management - requires no legislative change.”

John Connor, CEO of The Climate Institute

The Accidental Investor Taking back control of your future

September 2012

A new social media platform – The Vital Few - allows people to take back control of their future and make sure their pension funds are investing in ways that help tackle climate change.

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The Vital Few is an engaging new social media platform, managed by the Asset Owners Disclosure Project, that empowers millions of retirement fund members to help redirect their savings from high-carbon, high-risk investments to ones that can help secure a sustainable and prosperous low carbon future and ensure safe member returns.

The Asset Owners Disclosure Project (AODP) is an independent global not-for-profit organisation whose objective is to protect members' retirement savings from the risks posed by climate change.

The AODP was originally developed in 2008 as an initiative of The Climate Institute and while it is now a separate entity, the two maintain a close working relationship.

For more information on AODP visit…http://www.climateinstitute.org.au/asset-owners-disclosure-project.htmlor http://www.aodproject.net/

Background

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Maybe you reduce, reuse and recycle. Maybe you’re into using renewables, buying local, and drinking fair-trade. Whatever the case, one thing’s for sure, you’re aware of how you’re spending your take-home income, you’re spending it the way you want to.

But are you aware of how your pension contribution is being spent on your behalf?

Did you know… Over 55% of your mandatory pension contribution is invested in high-risk, high-carbon assets with less than 2% being invested in low-carbon assets.

You may be accidentally investing your money in things that are out of line with your own values, like dangerous high-carbon industries. Not only does this jeopardise the environment but it also places your own personal finances under significant threat.

The Issue

By becoming one of The Vital Few you can take back control of your future and start to invest with intent.

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Nearly $60 trillion is tied up in pension funds globally. That’s the single largest consolidation of money found anywhere in the world.

So when it comes to solving the greatest challenge of our generation - reducing our reliance on fossil fuels to safeguard our environmental and economic future - the pension pot of wealth must be called into action.

Remember it’s your money. Pension fund managers are simply custodians acting on your behalf.

Climate change is the most high-risk, high-certainty event that will ever impact global investment. Pension funds worldwide are largely exposed and ill-prepared for the predicted rapid re-pricing of carbon which will guarantee things are no longer worth what they once were. The casualties of their short-sightedness will be your financial nest egg for the future.

The Cause

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Send a letter through The Vital Few network and your concerns will be directed straight to the top of the investment chain.

Pension funds are legally bound to answer even just 1 letter from a member. If 1 then 10 then 100 then 1,000 of us send just 1 letter each, it will pile on the pressure and effectively force disclosure of pension funds’ damaging investment practices.

What A Few Can Do

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it’s the only thing that ever has.”

Margaret Mead, American cultural anthropologist

By asking them to hedge climate risk by increasing low-carbon investment from less than 2% to 5%, this will redirect billions of investment dollars and create a tipping point ushering in the low-carbon economy.

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You can get involved as part of The Vital Few in a number of ways:

1. Visit www.areyouthevitalfew.org2. Choose one of the short interactive experiences in the action bar at the top of your

screen. Make the selections that represent you to personalise a letter and reflect your values, vision and concerns.

3. Join The Vital Few in a few quick steps and become part of a collective of inspiring, like-minded individuals who are courageously rewriting the future.

4. With one click, load your slingshot and send your letter straight to the top and ask the decision makers in your pension fund to disclose how much of your money they are currently investing in high-risk, high-carbon assets and what they are doing to hedge climate risk on your behalf.

5. Share The Vital Few story with your friends and family. Blog and tweet about the problem or post your unique Vital Few member badge on your Facebook page.

6. Visit The Vital Few Community and have some fun telling us what you want for your future.

Taking Action

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Tell your pension or superannuation fund what's important to you. Craft your personalised letter and send it straight to the top.

Taking Action

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One of the greatest benefits of being part of The Vital Few is that you get direct access to the decision makers in your pension fund. However, they may respond in a number of ways from superficial and elusive to legitimate and committed.

Here’s what to expect. Your fund will either be a:

What Happens Next

Fixated on fossilfuels, this fund is sobesotted by the allureof short-term returnsthey deliberatelyavoid any dialogueabout the danger ofhigh-risk, high-carboninvestments.

Adopting the herdmentality of resistance, this fund is sitting on the fence waiting for another fund to make the first move.

Cleverly using greenwash techniques, such as their commitment toESG (Environmental,Social & Governance)this fund is distractingyour attention from the real material issues.

While politelyacknowledging theimportance of climaterisk and recognizingyour serious personalconcerns this fundconveniently fails totake any responsibilityfor the solution.

Fully engaged withevolving their investment process to incorporate climate risk this fundis seeking new andinnovative ways to gain high returns, without compromising future prosperity, both financial and environmental.

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What People Are Saying

“Sitting atop the wealth chain, the pension industry has continued its fast and furious spending spree on high-carbon, high-risk investments with little accountability for their impact on the long-term financial security of both individuals and the broader economy. The Vital Few’ platform can be used by anybody signing up as a free member to exercise their legal rights in forcing their funds to demonstrate how they are performing their fiduciary duty in managing big systemic risks such as climate change.”

Julian Poulter, Executive Director of the Asset Owner Disclosure Project (AODP) & Business

Director of The Climate Institute “Through mandatory retirement fund contributions and other savings, millions of workers have become accidental investors and participants in short term and unsustainable investment decisions with global impact. This vital tool is part of a profound change in the operation of global capital…These citizen investors can now collaborate to help make the kind of sustainable economy we need for a more prosperous future."

Sharan Burrow, General Secretary of the International Trade Union Coalition

“With unprecedented extreme weather events, historic melting of the arctic ice cap and radically inadequate action from our governments, this new social media platform opens up a new front for millions of fund members.”

Kelly Rigg, Executive Director of the Global Campaign for Climate Action

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What People Are Saying

“This is clearly a milestone inonline movements. Never before has the online movement been able to align the financial interestsof so many people with the interests of global sustainability and prosperity.”

James Slezak, Partner, Purpose.Com (founders of GetUp and Avaaz) partner

“Asset owners like the pension and super funds appear to have learnt nothing from the mismanagement of sub-prime mortgages which triggered the Global Financial Crisis. The Vital Few is an online community where even a few pension members can lead real change. The pension industry is failing its members, and it may only take a vital few to steer it back on course.”

Dr John Hewson, AODP Chair & former leader of the Liberal Party of Australia

"The bedrock principle behind capitalism is that it works when owners look after their property…The Vital Few initiative, by starting with the issue of climate risk, is a milestone in helping restore genuine ownership to capitalism.“

Stephen Davis, Senior Fellow at the Harvard Law School Program on Corporate Governance/Brookings Institution

& Co-author of The New Capitalists: How Citizen Investors are reshaping the Corporate

Agenda

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Be Part Of The Vital Few

www.areyouthevitalfew.org.au