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Inner West's Sydney board claims to have totally disintegrated fossil fuels after a three-year process that began before the merger of the Leichhardt, Marrickville and Ashfield boards.
The council is now asking the New South Wales government to work with the big four banks "to develop financial products that will allow more organizations to follow our example."
The council spent about $ 100 million over three years and is among the 40 local governments in Australia that have taken steps to reduce their spending through climate change investments.
Its divestment included the withdrawal of money held in the products of the four big banks – with the exception of a few longer term investments in climate and socially responsible bonds – and a transition to other investments in non-fossil energies.
This follows a long campaign by the 350.org environmental organization that has pushed institutions to divest fossil fuels.
At its first meeting in 2017, the newly merged Inner West Board pbaded a motion to completely divest itself of fossil fuel funds.
Leichhardt already had a 50% divestment target before the merger, and his previous mayor, Darcy Byrne of Labor, now Mayor of Inner West, said the new council wanted to continue the process.
"The western interior of Sydney, sometimes called the Western People's Republic, is home to a huge population that believes that climate change is an existential threat to society," Byrne said.
"We are determined to make the Western Interior a national leader in the environmental debate, which involves taking important symbolic positions such as disinvestment, but also putting our money within the reach of the hand."
He added that the process was managed in stages and with monthly reports from City Council staff to mitigate financial risks.
Byrne said they had always encountered difficulties and that Tcorp – the Treasury of New South Wales – had worried at a meeting last year that this could affect the board's ability to borrow funds.
A spokesperson for Tcorp stated that her policy was "not to discuss client work" and that she could not answer the questions, but she confirmed that the agency was working with the board on funding for his new pool in Ashfield.
A spokeswoman for Inner West's board said she wanted the state government to work with the big banks to develop short-term investment options unrelated to industries that contribute to global warming. .
Glen Klatovsky, interim managing director of 350.org, said Australia has more local governments than anywhere else in the world that have committed to divesting.
He said that Inner West, to his knowledge, was NSW's first to manage 100% disinvestment because of the work and challenges it entailed.
"The council has the legal and fiduciary duty, under the Local Government Act, to pay attention to their investments," said Klatovsky.
"Many have raised the issue of government-bank collaboration to create a fund that responds to this public demand, so it would be much easier for Australian local governments to meet their disinvestment commitments.
"At the moment, there is no financial reason for this not to happen."
Klatovsky said 350.org had worked with nearly 40 boards that had committed to divest, but that the total number of similar commitments in Australia was higher than that.
"The most interesting place is WA, where 33% of the population is covered by boards that have disengaged," said Klatovsky.
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