Green, but under the thumb
The Australian Conservation Foundation has called on government-controlled funds, including the Future Fund, to make responsible investing an integral part of their strategies.
The ACF released new research at the Conference of Major Superannuation Funds that found many of Australia’s large government-run funds were making investment decisions that directly conflicted with publicly-stated government policy to reduce emissions and tackle climate change.
ACF executive Don Henry said that with so much emphasis being placed on climate change by governments at all levels, people would be shocked to discover how many government-controlled funds were still investing $47 in fossil fuels and uranium for every dollar invested in renewable energy.
“Through their investment decisions these big pools of government capital have a significant impact on the health of our environment and society,” he said.
“Rather than invest this public money in companies building new coal-fired power stations and mining uranium, it should be invested in companies developing renewable energy and finding innovative ways to use energy efficiently.”
Henry claimed government funds that did not manage environmental risks in their portfolios put at risk their financial returns and “the world we will leave for our kids”.
The ACF-sponsored study found that 36 federal, state and territory investment funds, with combined control of assets worth $206 billion were, on the whole, behind industry ‘best practice’, but that the majority were not considering environment, social and governance risks in their investment decision making processes.
Henry said that while some government funds were headed in the right direction, others were not.
“The ACT Government has conducted a whole-of-government review of responsible investment practices, but the biggest federal fund of them all, the Future Fund, worth $59.6 billion, does not appear to have made any commitment to consider environmental, social and good governance principles in its investment decision-making,” he said.
AUTHOR
Mike Taylor
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