Funds managers must put their money where their mouths are and shift investment towards reducing carbon emissions, according to superannuation guru Garry Weaven.
In a speech delivered on Monday night, Mr. Weaven blasted ”a lethal core of entrenched vested interests in Australia and around the world” for attempting to frustrate action against climate change.
Mr. Weaven, who oversees $23.3 billion of superannuation investment as chairman of Industry Funds Management, said the science behind climate change was becoming more ”alarming”.
And investors were failing to price in risks such as trade sanctions against countries that produce a lot of carbon or the forced closure of coal-powered power stations without compensation, he said.
Mr. Weaven told BusinessDay the failure of some business leaders to adopt a clear position on carbon pricing was ”pathetic, when you consider the stakes for their children”.
”Investors … now need to ask more questions and ask them more forcefully … not accept silence for an answer,” he said.
”The ultimate owners of these companies need to ask them: ‘Are you actually funding organizations like the Institute of Public Affairs to put out the nonsense that they put out denying climate change?”’
Mr. Weaven said the IFM had pumped about $2 billion into renewable energy through its ownership of Pacific Hydro, which generates hydroelectricity in Chile and Australia.
But it was up to funds managers to make the decision to make environmental factors part of the investment decision, he said.
”Those that can stop and think about that have a chance of getting a bit ahead of the curve.”
He said that he believed companies such as Woodside were already factoring a carbon price into their forecasts.
”I think a lot of them have and I think the better ones have,” he said.
”They still might get a windfall if there’s no carbon price.”
He said many of those complaining had been warned that their investment decisions were unwise.
”And now they’re not happy because those benefits might be cut short because of the fact of what the world has to do about reacting to climate change.
”Well I’m sorry, but the nature of a dynamic capitalist system is that people have to adapt.
”Technology wipes out companies too, but that doesn’t mean we advocate not introducing new technologies.”
