Freedom-of-information documents have suggested that the guardians of the $70 billion Future Fund have not discussed climate change in any meetings since 2007, prompting questions about how Australia’s largest fund is managing carbon risk on investments.
In response to a Climate Institute FOI submission requesting the minutes of all meetings where ”climate change” was mentioned, the Future Fund said no documents could be found matching the request.
The Climate Institute business director, Julian Poulter, said it was ”extraordinary” that Australia’s largest institutional fund had not been actively and concertedly managing potential carbon risk on investments. ”This is a clear admission that there has been no consideration, otherwise it would have been minuted,” he said. ”It is Australia’s largest fund and its sole purpose is to plug a long-term gap on Australia’s future pension fund liabilities. It seems extraordinary that potentially the greatest risk to that portfolio has had no consideration by the board of guardians.
”Australian taxpayers would expect that $70 billion of its reserves should be well protected from global climate change policy.
”This has nothing to do with the short-term outlook for carbon policy in Australia and the global direction of global policy and proper risk mitigation.”
Mr Poulter said the Future Fund had discontinued its participation in the Asset Owners Disclosure Project, a joint initiative between the Climate Institute and the Australian Institute of Superannuation Trustees, which surveys and assesses super funds’ ability to manage the risks associated with climate change.
Mr Poulter, who is executive director of the Asset Owners Disclosure Project, said the Future Fund had participated in the 2008 and 2009 surveys but now says the survey is too ”onerous”.
”We haven’t revealed this in previous years because of confidentiality but the Future Fund did disclose information in the first two years of the survey. So to now say that it is onerous is a bit rich,” he said.
A spokesman for the Future Fund disputed that climate change risks were not discussed within the fund and at the highest levels.
”In formulating and implementing its investment strategy, the board considers and discusses a variety of risks such as market and credit risk as well as environmental, social and governance risks, and climate change forms part of that discussion,” he said.
