Newcastle, Australia: some of the Pacific Climate warriors who blockaded the world’s largest coal port with their canoes. © 350.org

Recently, the Australian National University chose to exercise its right to align its morals with its money and divest from seven resource companies which ranked lowest on its corporate social responsibility register.

These companies included South Australian gas producer Santos and Oil Search, an oil and gas exploration company based in Papua New Guinea.

As the first university in Australia to make a conscious decision to divest for ethical reasons, ANU has since found itself at the centre of a major storm of controversy. After a three week barrage of criticism by the financial press, divested companies, politicians and academic commentators, ANU Vice-Chancellor Ian Young eventually found himself hauled in front of a Senate committee, forced to spend two hours defending the decision as if it were an issue of national security.

The drastic overreaction to this relatively minor investment decision demonstrates two things - firstly the overwhelming influence which the fossil fuel industry has over the levers of power in Australia, and secondly the fact that fossil fuel divestment is working.

Despite the hullaballoo made over the announcement, the facts are that the value of shares divested was a mere AUD $16 million – pocket change in the context of large managed funds – and the seven divested stocks were also significantly under-performing and would have been prudent to dump from a purely financial perspective.

Yet the announcement prompted an instant and virulent defence of the fossil fuel industry from Australian politicians. The Prime Minister denounced the decision as ‘stupid’, calling for an end to the ‘demonization of coal’ and even declaring ‘coal is good for humanity’ – a claim which was soundly challenged by a group of Pacific Islanders who recently came to Australia to blockade the world’s largest coal port.

Even Australia’s erstwhile Treasurer managed to weigh in on the debate, lambasting the university from a conference in Washington DC and accusing it of being out of touch with ‘what drives the Australian economy’. The fact his comments fell on a day when the Australian share market suffered its biggest loss in over a year speaks volumes about the unhealthy influence of big resource companies on Australian politics.

From the reaction of the financial press it appears that our media houses are not immune from this influence either. The Australian Financial Review, the main financial newspaper in Australia, is now in its fourth week of a concerted campaign to denounce and villainize ANU for having the gall to actively manage its own share portfolio.

The irony that a self-declared ‘free-market’ newspaper (albeit one majority-owned by mining magnate Gina Rinehart) has chosen to rail against an organization for exercising its right to invest where it chooses cannot be overstated. One particular commentator even accused the university of acting in cowardice and backing down to the bullying of green activists (again, the irony seemed a bit lost on the author).

The Murdoch press took a far less subtle approach, equating fossil fuel divestment to terrorism in a cynical front page ‘exposé’ uncovering the past of a priest involved in the Anglican church’s divestment decision.

In contrast, Scotland’s Glasgow University – which in the same week announced it would divest from ALL fossil fuels, received nothing but praise from local, national and international press.

The hysterical reaction to ANU’s announcement is strong proof that the Fossil Free movement is having an impact. Prior to the announcement, Vice-Chancellor Young was a self-confessed sceptic of the divestment movement, publicly dismissing it as ‘just a side-show’.

ANU’s decision was originally intended as a compromise, but the furore has caused Young to revise his opinion, admitting to students ‘you were right all along’.

Divestment is working, and it’s causing Australia’s elites to sweat. A movement started in the United States by a group of university students and veteran environmental activist Bill McKibben has now spread to Canada, Europe, Australia and New Zealand, with more than 400 campaigns on university campuses and over 100 institutions committing to divest from fossil fuels in their entirety.

Australia is perhaps right to fear fossil fuel divestment more than most. It’s the second-largest exporter of coal in the world, and with plans for rapid expansion, Australia is far more exposed than most economies to the movement of capital away from fossil fuels. It has thrown its lot in with coal in a big way, with the repeal of the carbon price and the removal of the mining tax.

It is also gambling its economy on the development of nine new coalmines in the Galilee Basin, which will result in a doubling of coal exports and tripling of carbon emissions. At a time when the price of coal is undergoing a major structural decline, one is forced to consider whether this is really such a wise bet.

On the other hand, the Coalition government seems hell-bent on destroying Australia’s renewable energy industry, with attacks on the renewable energy target and a climate policy that won’t even meet its embarrassingly low target of 5 per cent. Aside from appeasing Treasurer Joe’s abhorrence of windmills, these moves seem a short-sighted decision when economic powerhouses like China and the US are pouring cash into clean energy research and development.

The theory of ‘stranded assets’ is based on the notion that governments will be forced into rapid action to reduce carbon emissions, in order to meet their international obligations to limit climate change to two degrees as agreed in Copenhagen.

Many funds both here and overseas have hedged their bets on this matter, including tertiary education superfund UniSuper, AMP Capital, health superfund HESTA and Local Government Super. But whatever your belief, climate change is something which any responsible investor needs to take into consideration.

Rather than criticizing a university for exercising its right to invest where it wants, Tony Abbot and Treasurer Joe should be putting some more thought into how to move Australia’s investments from the past and into the future.

Instead of being the mouthpiece of industry and trying to bully one university into submission, the Australian media should spend some more time addressing the true problem of the mining industry’s influence over our political system.

Charlie Wood is Campaigns Director at 350.org Australia. You can find her here.