#67 David Le Page – Transcript

Louis van der Merwe
Welcome to another episode of Financial Planners, South Africa. Today I have with me in the studio, Mr. David Le Page. David is the co founder of fossil free South Africa, and had a wonderful presentation at the recent Financial Planning Institute convention. David, thank you so much for joining us today.

David Le Page
Louis, thanks very much for inviting me to chat with you and looking forward to sharing some information and ideas with you and your listeners.

Louis van der Merwe
And I think it would absolutely just be that an exploration of what Fossil Free South Africa is doing, how we can start talking to our clients about what the money should actually be doing. Right? Because we always focus on what are the returns? How much is your money growing? And after your presentation, I had to sit back and actually say, well, it’s one element of money to be doing well in terms of growth. But I think maybe our clients money and our own money should maybe be used for some good as well give us the kind of backstory of where Fossil Free South Africa was started as one of the cofounders. Wondering, and this is probably close to a decade ago, when when this happened. So please tell us that story. I’d love to hear that.

David Le Page
Sure. Well, my background is that I’ve been a science and human rights journalist for probably 20 or more years now. And I became aware of the issue of climate change around about 2005. And spent some years kind of exploring, working as a journalist, working with some organizations. And around about 2013, a friend of mine, who was a sustainability consultant, did a screening of a documentary called do the math, which introduced this extraordinary new social movement that was then just starting in North America, a movement for people to stop investing in fossil fuel. And at that stage, it was being led by campuses, so small universities in America and Canada were starting to divest their endowment from fossil fuels. As a recognition of the fact that government action on climate change was just way too slow. I was inspired by this movement, it seemed to me a potentially very powerful strategy for taking on taking on the fossil fuel industry. And I thought, well, I am a UCT graduate. I live here in Cape Town. Let’s see if we can get the University of Cape Town to divest from fossil fuels. And we sent a letter myself and nine other alumni and staff and students of UCT to the to the university asking them to divest. You can’t just send one letter when you’re dealing with any kind of bureaucracy, you have to follow up. And so we followed up and we started hosting events with students and one thing led to another and the next year, we created the small nonprofit, Fossil Free South Africa, which has expanded its mission mission beyond UCT. And we’ve been working for for a number of years now trying to get the message across that we cannot afford to continue investing in fossil fuels if we want a future that is sustainable and humane for all of us.

Louis van der Merwe
So this very much was a frustration with the lack of change from a government perspective if for you, you correct why focus on The fossil fuels is that the element that we should be focusing on when we talk about climate change?

David Le Page
Yes, very much. So. I mean, burning fossil fuels, coal gas, and oil is overwhelmingly still the biggest source of the greenhouse gases that are responsible for, for climate change and what is rapidly becoming, unfortunately, a climate crisis, a climate emergency climate breakdown, ready the destabilization of the scale of human beings over the past 200 years, we’ve increased the amount of carbon dioxide in the atmosphere by 50%. And the amount of methane in the atmosphere by 150%. And the methane is a greenhouse gas, but 50 to 120 times more potent than carbon dioxide. So we’re reaching extraordinarily profound changes on the biosphere. Carbon dioxide is literally making the oceans more acids that 80% more acid. And alongside climate change, we have an accelerating biodiversity crisis, where we’re literally taking the mazing living systems that have supported our lives for so long. For for 1000s and 1000s. of years, we’re taking living systems and transforming transforming them into stuff. And it’s an approach that, that no longer works. There’s a metaphor that we can draw with, with when something becomes toxic, or substances. When you when you’re you’re talking about the concept of toxicity, a lot of substances can be completely benign in small quantities, but at a certain concentration, suddenly, you run into problems, even water, you can poison yourself drinking too much water, and carbon dioxide and methane, which had natural levels in the atmosphere are completely unproblematic. As human beings have accelerated increase the quantity round about 1970, I would say, we passed this fundamental tipping point where we rip past the point of what was sustainable for for, for the good of the planet, at least, the good of the planet as a safe, like support system for human beings.

Louis van der Merwe
That’s quite scary that we already passed that I was surprised to hear that, you know, it was already 1970. Yet, the speed at which we taking action is so slow, obviously, hence you starting Fossil Free South Africa. And now in your presentation, you also shed some good news that UCD has come to the party can can you share with us why it took them so long to actually take action? And what that now means that they are physically divesting from fossil fuels or the investment in fossil fuels?

David Le Page
Yes. Certainly, I actually had coffee earlier this week with ucts, finance, former finance director. So he was kind of one of the people I was talking to, on an ongoing basis over the over the years that we were busy with this campaign. And the thing is, South African universities are institutions under a lot of pressures, South African students face a lot of very basic issues such as accommodation and food in some instances and being able to pay the university fees. And so in North America, students have been incredibly active on on climate issues here in South Africa, not so much. And there have been times where, for example, we had the fees must fall movements in 2016 2017. All those kinds of issues slowed down, I think UCT progress on divestments, but they got there, in the end, run that 2017 They created a Responsible Investment Committee in response to our activism. And last year, eventually, earlier this year in March, finally the University took the decision to divest from fossil fuels. And they’ve really made substantial progress with with implementation, sending off some big, very fossil fuel intensive offshore assets.

Louis van der Merwe
So what I’m hearing is that it just there’s there were more pressing items to deal with. And we’re not picking on the University of Cape Town. But it’s to highlight this lack of urgency and the speed at which we making changes. I know you’ve been doing some work with asset managers in South Africa. Tell us how that came about and how you identified the asset managers that you’re targeting to have conversations around the investment of fossil fuels.

David Le Page
Well, I just want to go quickly to the point about we’re not picking on the University of Cape Town because essentially what you’re putting out here is the point that when it comes to climate change society as a whole is dealing with a problem which we haven’t got the institutional framework to deal with. And so it’s always kind of pushed to one side because we’ve kind of created intellectual and social and political systems that are Good two other kinds of issues. And now we have this extraordinary issue that is outside our normal framework for decision making. And it just gets neglected again and again and again because of that. So that’s really well, one of the things that we that we need to change. And that’s the same thing applies very much too. This leads on to your question about asset managers, the decision making framework that asset managers use is essentially not very different to the one that they’ve had in the 1960s. And it’s a framework that is based on the idea that the externalize costs of investments, that is the environmental impacts of how a particular business operates, and the social impacts of how a particular business operates. Had, historically, those externalized costs were never so critical and so substantial that they could undermine the business and the world as a whole. But that’s the transition that we went through in 1970, that I was referring to, which was that that is the time in which those externalized costs started to mount up to such a point that if you take the world we live in as being the economy in the biggest sense, we started to make up our global economy, not just the global economy, considering financial and non financial factors together started to shrink, because we started to destroy the natural capital in which we all dependent around that time in rather critical way. So with asset managers, asset managers, very often, pension funds are better, because they often have a long time frame for decision making, and they look 3025 30 years ahead. But asset managers very often don’t have a time horizon beyond three to five years if that, and it’s a real problem when you’re talking about an issue like like climate change, where now the decision making framework is based in some instances around this concept of net zero. So we talk about being able to bring global carbon emissions down to net zero by 2015. That is actually way, way, way too slow. Still, that that’s the kind of framework that most asset managers still don’t know how to deal with. And I think partly, it’s just a human thing, you have people sitting in jobs for an average three to five years before they move on. So where’s the accountability?

Louis van der Merwe
This is quite frustrating that we don’t have the framework that it’s not from a governmental perspective, or from an institutional perspective, and that we’re almost relying on retail investors that the man in the street to say, let’s change this from the bottom up is that what we see happen is people just rallying, getting together and saying, we need to change, we need to change this quickly. I think

David Le Page
we’re, unfortunately, we’re not seeing it sufficiently yet. And I think in the investing public, there’s a growing awareness that these are critical issues, and a lot of frustration from people that asset managers are not taking the issues sufficiently seriously. And we now have a list of over 100, Alan gray clients who want a fossil fuel free fund from Alan Gray, I’m not picking on Alan gray in particular, that just happens to be the Fund for which people who have been supporting us have been most active. But we also want to approach other asset managers, as part of what we call our index off of free campaign, to, to ask all of them to start fossil fuel free investment funds. But we’re starting with Alan Gray, because that’s where most of the clients interest in be to be. And we’re gonna be sending that letter off tomorrow to ask them for that funds. So that should be a very interesting conversation and engagement. Not these because in our experience of the different asset managers, and we held workshops with asset managers in 2017, and have had an ongoing engagement since then, but in our experience with the different asset managers, and Andre has been, shall we say, more conservative than other

Louis van der Merwe
other asset managers willing to engage on this topic? And what what’s the feedback that that you’re getting? Or do they just dismiss you and say, No, we’re not interested, we don’t think this is an issue, or is there an element where they will consider creating additional fund clauses? Because obviously, part of this is also a business decision. But what does the engagement look like? Those ones you mentioned in 2017? How well did they receive this message? And is it something they’re thinking about? Well,

David Le Page
to take Alan Gray, for example. I mean, we’ve had feedback from people that Alan gray saying very specifically to us, that our clients don’t want or not interested in these issues. And our clients don’t want Fossil Free funds. That was a few years ago that I think we can now prove to them that that’s not the case. Yeah, there are with funds on the whole that hold us Toulon 91 have been the people that have been more responsive to this kind of conversation, we’ve had a couple of asset managers that have been incredibly supportive. And we’ve had some sponsorships, for example, from future growth with some of our events. So it vary substantially from from asset manager to asset manager. But I think it’s fair to say that I don’t think any asset manager in South Africa is doing enough. And that very often they will argue, well, that’s because they’re just dealing with five mandate. But I think, given the understanding that I see off the climate issue amongst the people who run the management companies, and I’ve been amazed and impressed by by the, by the knowledge that that very often, top analysts that asset managers like I didn’t really do have, I failed to understand why they don’t translate that into information that is going to their clients about this big systemic risk that unlike anything that has come our way before, that has very profound implications for the future of investments and the future environments in which people hope to enjoy their investments. So I think there should be a far more active conversation between asset managers and clients on these issues, than there has been

Louis van der Merwe
debit. Do you see any global businesses dealing with this in a manner that aligns to what you’re saying aligns to what you would like to see or the way you’d like fund managers to handle these assets?

David Le Page
Well, yes, definitely. South Africa, unfortunately, has a quite a prayer track record, when it comes to Ethical Investments, other countries, ethical investment has been an industry for for decades, in Europe, in the United States, in Australia, in the UK, for a long time, you’ve been able to if you were, if you were so inclined to go out there and look for Ethical Investments, not just on climate, but on social issues on human rights on labor, right? On a host of different issues. And so on Africa, although we have a very well developed financial sector, and in many respects, we’ve been very, very poor in doing the same, same kind of thing. What we are starting to see is growing interest in this new model for Responsible Investment called ESG. And we can unpack that a bit. But I think ESG has been adopted very reluctantly, here in South Africa. And there are good reasons to be skeptical about ESG methodologies as I unpacked at the FBI conference. But the fact that ESG exists shows that there’s a growing recognition that these issues are important that must be addressed in some way. And whether he or she is what are some of the ESG methodologies that have been developed, is the best way to do that is is up for debate. But it’s definitely a response that shows the importance of the issues being understood in the way they

Louis van der Merwe
mean, oftentimes people will talk about, oh, I don’t want to give up returns and would like to invest rather than a fund that has a better performance than one that has, if ethical overlay or ESG factor. Is it a given that we need to give up returns yet still have been investing in ethical funds? I

David Le Page
think overwhelmingly the evidence is, and this has come from surveys that have been done by financial services companies ESG funds generally perform as well as mainstream plans and very often outperform mainstream funds. So the first answer, but I get the the question is whether ESG funds, as we know them actually go far enough in terms of actually remedying the systemic issues that we’re seeing? And the answer to that is, no, they don’t. But what I think we have to start understanding is that is possibly a concept of personal returns and social returns on investments. And again, this is the that transition or that inflection point that we passed through in 1970. And until then, I would say you could ignore the issue of whether or not there was sufficient social return on your investment, because you knew that the surrounding sort of human and biological ecology, which on which we all depend would be secure. But that’s no longer the case. And so you do want the social return on your investment now, even if you’re not getting a personal return, because you actually want to have a reasonably stable society and planet to live on. And so just going for the virtual personal returns when when the social return is being undermined, no longer makes any sense. Deeper argument, or am I making

Louis van der Merwe
no no, I’m trying to play with this idea of the social return and know if you were to engage with a financial planner, and they talk through, you know, the upside is either your personal return a return growth of your money, or social returns. What would a conversation like that look like? You know, for someone that’s very passionate about this, what would you expect your financial advisor to? How would they prompt this conversation? And how would they help way up the importance of the two for you as an individual? Or maybe you as a family?

David Le Page
Well, I think I think first of all, we think people needn’t be too alarmed by this idea that the point is you don’t have to give up all hope of having decent returns on your investments. I would say you should probably understand that where there has in the past been extraordinary outperformance that that our performance is based in based on rather dodgy factors. So for example, if we look at the companies that have returned, performed the best on the footsie over the last 30 years, those are British Aerospace, and British American Tobacco. And those are obviously companies that externalize a lot of their costs by imposing horrendous costs on society. So we don’t want that kind of out performance, you can, but you can still get it, you can still invest responsibly and get decent returns, I think

Louis van der Merwe
I like this idea of framing it around the external costs, yet. I wonder how many clients would resonate with with that concept? And just to say, Okay, well, what are the parameters? What would? What are the rules of investing? When we look at your portfolio terms? What can

David Le Page
we think about external costs this way, and imagine you live next door to somebody who has a business, maybe, maybe it’s a, I don’t know, a kennel. And maybe the one of the ways they cut costs is by throwing all the poo that accumulates over your wall. So that’s kind of a metaphor for how some businesses behave in this world in the world, unfortunately. And essentially, when, when big fossil fuel companies emit carbon in huge quantities, what essentially what they’re doing is throwing their to their metaphorical poo at the rest of us. And so what we’re essentially saying is, well, we can’t afford to have businesses that operate that way anymore, everybody has to take care of their and their own external costs, and stop imposing them on the rest of it.

Louis van der Merwe
So David, who’s policing these external costs from these businesses,

David Le Page
but again, really, coming back to the metaphor of having a kennel next door where something was thrown over your wall, in real life, you’d go and you’d follow the council and the council would come around and give them a clap and sorted out. And that’s really what we should be expecting from our governments. But governments are failing to act sufficiently on the on the issue of climate change at the level that they should be. But really, one of the points I made at the FBI conference was that the primary thing that you need to be doing in response to the climate crisis is to become very active and involved citizens. And yes, our investments can play a role in this and we should be looking to our investments to play a role in this, but investment alone is not going to fix it. We’ve gone through we’ve lived through an era, unfortunately, from from about 1980, when Ronald Reagan became president in the United States, and Margaret Thatcher became the Prime Minister of the UK, way government regulation, which came to be regarded as a very bad thing. And of course, sometimes government regulation can be perverse and inefficient. And there are reasons to be pretty critical of it and look at how it’s designed at time. But overwhelmingly, as human beings, we’ve discovered over the centuries that there are some things areas of human life that are best taken care of, by by authorities, like like governments. We did that with the hole in the ozone level. And that was kind of fixed by collective governments or began to be fixed by collective government action from the 1990s. at a social level, that all sorts of costs, and dysfunctions that we need as citizens policing, sewage, roads, and so forth. These are things that are best organized by governments. And managing solution is something that should be strongly managed by governments and how governments are failing to do that. And one of the reasons for that is the incredible power and influence of the fossil fuel industry, which in many instances, has corrupted government, not just in a trivial Finance, Financial sense, but they have people are very often don’t sit and impressed by power. And fossil fuel companies are wealthy, powerful institutions that are very impressive for your average politician. And even if they’re not actively corrupt in their dealings with those, those institutions. Those institutions have extraordinary power. And it’s very easy to be swayed by them when it comes to making the rules about how pollution externalities are managed.

Louis van der Merwe
What happens? What happens if we don’t get this? Right? I mean, how, how bad can things get and what are the timelines we’re talking about? Yeah.

David Le Page
Well, I think we’ve gone through a transit and other transition in the last couple of years with the climate crisis has moved from being something that was kind of a future crisis to being a present crisis. So As a again, as I mentioned during FBI conference in Pakistan earlier this year, we saw most horrendous flooding affecting huge portions of that country, we saw rainfall levels, not just a few percent higher than the average was several 100%, higher than the usual seasonal averages. We’ve seen an absolutely extraordinary amount of devastation from climate change being visited on a country, which produces very little average per capita carbon emissions itself. The ordinary Pakistani person is not nearly as responsible for the climate crisis as your average American or your average middle class person living in Johannesburg or Cape Town, for that matter, we’re seeing a rise in the in the number of sharp rise in the number of natural disasters that are happening around the world. And we’re seeing very real and immediate and worrying impacts. And one of the crises that is emerging now is that what few people don’t understand about climate change is that it is potentially a self reinforcing process. So as human beings emit carbon dioxide that warms the atmosphere, it destabilizes certain natural systems that have been acting as cooling agents for millennia. And those, those systems now that they’re destabilize start to add to that to the, to the climate crisis. So as for example, ice melts in the Arctic heaters no longer reflected back into space, but it’s tough to be absorbed into the ocean, as we see heating it in, in the Arctic regions, we see forests that previously would never be burned, burning and adding yet more carbon dioxide to the atmosphere. We see permafrost melting and methane that being released from from the permafrost, we see ocean currents being destabilized by glacial melt, ocean currents that have been channeling heat to certain regions that have relied on them for the stabilization of their weather for centuries, where agriculture has become adapted to having heat brought by ocean currents, those ocean currents are being destabilized by ice melt from, from the Arctic and from Greenland. So it’s a very real and present crisis. And if we don’t, arguably, if we don’t manage to cut global greenhouse gas emissions by 50% or more, in the next few years, we’re going to lose the chance of potentially containing this crisis, and we will get into a situation of runaway global warming. And it will be in my view. I mean, I just think that that’s sometimes talk about human extinction. I don’t think human beings are going to be extinct by anything. I think we’re a very highly adaptable species. But there is scope for enormous chaos, and misery and unpleasantness ahead of us. If we don’t get a grip on this crisis,

Louis van der Merwe
David, on a personal level, how do you deal with the heaviness of this topic and the frustration around the speed just day in and day out having to do fight for this? Yeah, I’m curious to just hear how are you’ve managed to process that and, and work with it?

David Le Page
Yeah. Thanks for asking about that. At times, it’s very hard. And I’ve got three small boys myself, I was a climate activist, before I had three small boys, I do quite often wonder about the stability of the world that I’ve brought them into and what kind of life they go to have. I mean, I should say that I think there is an upside to all this as well, which is that we do get this transition that we need to go through, right, that we can create an amazing future for humanity. But the next few years are very important in that. And yeah, at times, it was extremely heavy on the and I do get depressed and, and feel scared. And, yeah, I think I’m fortunate in that, to some degree, I have found that an area somewhat to my own surprise, where I feel like I’m effective and unable to make a difference. Am I making enough of a difference? The evidence is known. Along with MIT, for me and many other climate activists, we know that we’re not making enough difference, because we’re not seeing the change that is needed yet. But we are also seeing very profound levels of social awareness around this. And we get to go through these periodic ways of growing social awareness around the world. And we’re at a very different place to where we were socially on this on this issue 10 to 15 years ago. But we really need massive transformative change in the present decade. I

Louis van der Merwe
think what we’re seeing in the financial planning world is that we act as this filter between news and the real world and what’s happening and kind of bringing that to our client base and saying, actually, this is how you make sense of this information that you’re in very similar to what you’re doing right. This is how you make sense of climate change information. And this is actually the action that you can take. And this feels like another element may be a critical element. In terms of conversations we need to be having with our clients to say, this is one of the ways that you can live out not only your views, but how important it is that we reduce social costs, and that we improve this, you know, just like you might change your diet, or you might switch off lights that are burning unnecessarily or you might recycle, I feel like this should probably get to a point where it is frowned upon if we don’t do it. Right. If we invest in in fossil fuels. Oh, is that? Is that too naive to think that it can happen?

David Le Page
Well, I think we do all need to be engaged in those personal areas of change. But we actually, to properly address this problem, we have to get involved in social or levels of change. And that’s difficult in a country like South Africa, where we have a pretty flawed democracy where we don’t have the kind of access to members of parliament that we should have. But many of us are in positions of where we can start to make a difference. I mean, at a personal level, you could say, well, is the company that I part of aware of these issues? Do we have a climate change committee? Have we talked to our pension fund administrators about this issue? Have they made any changes? What are we doing in terms of our relationships with municipal officials? So there are, it is a frustrating country in which to try and tackle climate change through democratic processes. But we should be we should be making the effort alongside those those efforts that we make at a personal level, the fossil fuel industry has been very successful in creating the idea that they are just responding to the demand that we create as consumers. And they completely hide and conceal the fact that, for example, behind the scenes, they are constantly lobbying, to get massive subsidies for themselves that put themselves in a much stronger position than they should be incompetent when competing competing against renewable energy, for example. So what the what the fossil fuel industry has done effectively is to is to delay change, and delay action on climate at a multitude of levels, they’re still very, very busy with it. At the recent climate conference in Egypt, there were hundreds and hundreds of fossil fuel lobbyists working they’re far better resourced, and with far greater access, in many instances to power and the climate activists have. So they’ve slowed down this transition, they’ve given us the idea that it’s all our fault. And and they’re very happy to continue to have fans for continued to continue to use their resources that are completely out of sync with what scientists have identified to be safe.

Louis van der Merwe
So David, apart from people lobbying and saying, Hey, we need to we need to disinvest from these fossil fuels. If you could send a message to financial planners listening to this show, how would you want financial planners to change or the inclined to change the way we we view our investments or just work finance world in general? Well, I

David Le Page
think the question to ask yourself is, well, let’s look at our portfolio and say, What are these companies doing? And if they continue to do it for 510 1520 years? What contract kind of world is that going to lead us into? I recall a few years ago being struck by an asset manager saying capital allocation is essentially how we design the future. So are we allocating capital to the future that we want? Or are we allocating capital to a future that we don’t want. And if we want to allocate capital to the future that we want, then we need to be putting money not into fossil fuels, but into renewable energy into regenerative agriculture into a circular economy. And we need to be paying people decent wages and salaries. And at the same time that we do that, because it’s only when people are able to earn a decent living that they can can become empowered citizens who can tackle this issue. At a democratic level, that was the way that we need to,

Louis van der Merwe
I think that makes so much sense. And when when we’re looking at kind of the passive investment structure, you know, it follows the weighting of your shares follow the growth of that company. So the larger grows, the higher dedication, and it sounds like this roll around. Active company selection is a place where active managers can also differentiate themselves and say, hey, well, this is this is the value that we’re offering. Are there any passive solutions that you know of that have done this fairly? Well, maybe not in the local market, but even globally? Well, actually, this

David Le Page
is one example that we know of in the local market. The efficient group, and particularly division four, navigate and look from the past and back, I think it was March last year, launched a passive fund called the Select DCI ESG equity fund. It’s based on an s&p ESG fund ESG index. And it starts by excluding all thermal coal, tobacco, what they call controversial Bethan, then a couple of other nasties, we were involved in a long discussion with the originators of the stand together with the shareholder activist, and just share, and they created this fund put an additional hard screen on Cecil, which for some reason was not excluded by the methodology of the s&p index, you know, pointing us back to some of the inherent problems with some of these ESG methodologies. But we’d like to fund because of the the hard exclusions, we’d like to take that it marks it gives higher weighting to funds that score well on the global compacts, for example. So that’s one solution that, and it’s performed very well, it’s, I think it’s in that it’s not doing extraordinary performance, but it’s definitely doing acceptable performance. And we need to see more funds like that, here in South Africa. And then when you go offshore, there are a lot more options for funds that are either completely decarbonized or substantially decarbonized, which is what the way we need to be going on that one crucial issue.

Louis van der Merwe
Yeah, I think for me, if if we’re not prompting our clients to have these discussions, they will be prompting us very soon. And to say, let’s, let’s get the data, and let’s make sure that we are actively making a difference with with our money as well, and aligning that to the rest of our lives. Because we spent a lot of time with our clients and packing what’s important to them. And for anyone that has children, you know, like you mentioned, Dave, and myself got my daughter’s training too. And when I was listening, your presentation was like, wow, the, the world that she will grow up in will look very different from the world that we grew up in. And that’s scary. And that doesn’t necessarily have to be like you saying there are options for us. So for people listening to this, what would be the next steps? What would you what action would you want them to take today? When they’re listening to this?

David Le Page
I would say you need to call your financial advisor and say, what are what are you doing to get me and the options for investment that I that will give me the future that I want and not future I don’t want. And that needs to start a conversation between financial planners and the asset managers. Often the asset managers also say, well, we don’t see any demand from financial planners for these kinds of products. So it’s all everybody dancing around saying, well, nobody else is interested. I’m gonna say this. This has got to stop. We’re all very interested now.

Louis van der Merwe
I’ve heard some arguments where asset managers would say, well, we would want the one tech companies like Sasol, for example, to just to not be cut off from capital. And so to allow them to transition their business into something that is less fossil fuel intensive. What’s your take on that? What? Why do we think that’s not a suitable strategy?

David Le Page
Well, Cecil, obviously is a very big and important company and the South African economy. To some extent, we all depend on their products. The problem is that fossil fuel companies are notoriously impervious to change. Now, Cecil, in the last year has announced some big plans. They’ve set Net Zero targets for 2050, and so forth. And so if you took a superficial look at them, you’d say, Oh, well, Tesla was decided to change. But unfortunately, Safal is also a company that has set itself targets for reducing emissions, not just a carbon dioxide, but of other pollutants over the over the years. And again, and again, and again, they had missed their own targets, the most of the plans that they have for transitioning away from carbon have been deferred far too late. I mean, as I mentioned earlier, we need significant change in this decade. And so when it comes to dealing with Cecil, I mean, I know there are some asset managers already that will not touch them. But if you do have Cecil in your portfolio, I think at the very least, as an asset manager, you should be saying, well, we are going to partially divest. And we are going to make it very clear to settle that we are partially divesting and we want them to show a much accelerated timetable for transformation before they can see us actually going going back into them, and they need to demonstrate that they can meet their targets. So those targets need to be more ambitious and they need to show that they can meet them. And then we can start to talk about potentially reinvesting in

Louis van der Merwe
their relationship where they say, oh, no, I’m going to change just give me this chance. Yeah.

David Le Page
And I find that the the the arguments for active engagement with with companies like Cecil, somewhat bizarre. Firstly, it’s taken asset managers a very long time to start having these conversations. The first UN Convention on Climate Change was 30 years ago. But really asset managers have only in the last couple of years started to take these issues seriously to the degree they have. Secondly, there’s no evidence that they’ve actually secured any significant change from companies like Cecil. And that’s not a poor reflection on them. It’s a reflection on the nature of the of the industry, which is that these companies our international experience, very reluctant to change and active shareholders overseas that very often just thrown up their hands after trying to get change our change other companies like Exxon Mobil and said, This is a losing game, we’re just going to do this, because there’s no ways we can persuade these companies to change, maybe sessile will prove prove us all wrong. But until they have, we need to put a lot more pressure on them.

Louis van der Merwe
David, I get the sense that investors think that they have less control than what they actually have, and that they can have an active input in, whether we’d like the money to be invested. And like you said, the future that you want to see. And I would add, not only for ourselves, but for our children. Thank you for the work that you’re doing. And I would urge anyone to go to fossil free is a.org dot A and follow David and the work that they’re doing, specifically around engagement with asset managers. I think these are important conversations we need to be having. And it’s happening too slowly. Any last words that you’d like to add David from your side? Yes.

David Le Page
Thanks, Louis. It’s been great chatting to. And again, please, listen, listeners, if you could go to our website, click on our under our campaigns on our index fossil free campaign to sign up to ask your particular asset manager for fossil fuel free Investment Fund. We’re not expecting asset managers to divest their entire portfolio overnight, but the best thing that people who want this kind of fun should have the option for them, and we need to put pressure on them collectively to deliver. Thanks again.

Louis van der Merwe
Wonderful. Thank you.