The Centre for Policy Development (CPD) is calling for Future Fund to observe industry best practice to manage climate-related risk.
It recommended an expert review panel considered the fund’s statement of expectations and investment mandate to enable it to disclose and manage climate-related risk and investment opportunities.
Using publicly-available information, CPD found gaps were identified across the fund’s response to climate risks in target setting, corporate engagement, industry collaboration and governance when compared to global counterparts and investment industry practices.
CPD sustainable economy director, Toby Phillips, said: “The Future Fund invests on behalf of all Australians, and is required to observe investment industry best practice in how it does that.
“As citizens of a country with a lot to gain from energy transition and a lot to lose from climate inaction, Australians will naturally be concerned by these findings.
“With almost a quarter of a trillion dollars under management, the Future Fund is a major institutional investor acting on the global stage, and it’s reasonable to expect them to play by the same rules as other major investors and asset managers on climate risk.
“Global investors and capital markets are developing sophisticated responses to climate risk. By providing clear, unambiguous, expectations around climate risk, we can show leadership and put Australia’s sovereign wealth fund at the head of the pack.”
Last week, Future Fund was named as one of the world’s Top 100 Asset Owners with US$185 billion in funds under management.
