The Future Fund has rated poorly against other sovereign wealth funds in terms of its management of climate change risk, says The Climate Institute.
According to the Asset Owners Disclosure Project (AODP) index – which has been piloted in Australia by The Climate Institute – the Future Fund fared worse than international peers in 2014/2015.
The Climate Institute chief executive John Connor said: “Top rated funds protect their investments by engaging with the companies they own, divesting of heavily carbon-exposed assets, or deploying hedging strategies.”
“Meanwhile, the laggards seem ignorant of climate risks as well as risks that high carbon investments will be left stranded, or made worthless, by cleaner technologies, pollution controls or changes in consumption,” Mr Connor said.
AODP founder and chief executive Julian Poulter said: “The laggard asset owners are driving their funds without climate insurance and one day they’ll be in a nasty market climate correction and probably end up in court.”
According to AODP chair, John Hewson, asset owners have a “duty to mitigate portfolio risk against continuing political intransigence”.
“The leading funds know this and they are increasingly underweight carbon to the extent that if every fund copied their approach, we would be well on the way to solving climate change,” Dr Hewson alleged.
“It is now up to every pension fund member or insurance company shareholder to drive their funds into copying that model and taking the world into a safer climate.”.
Local Government Super Fund and Australian Super received an AAA rating in the index.
The onus is on the world’s biggest asset owners to solve society’s biggest issues without compromising on their financial responsibiliti...
Investors will have to brace themselves for climate change and start taking stakes in areas such as infrastructure and agriculture, with cur...
Mayfair 101 has launched its second fixed interest investment product in response to increasing demand for income-producing investments in t...