The Future Fund is mocking the Government’s anti-smoking laws by continuing to hold a $150 million stake in tobacco companies, the Greens say.
The $75 billion fund, which was set up in 2006 to help pay federal public servants’ pensions, also owns $180million of shares in businesses involved in making nuclear weapons.
General manager Mark Burgess told the Senate’s finance committee yesterday the fund took its environmental, social and governance responsibilities very seriously and had employed specialist advisers to deal with the issues.
In response to a question from Greens health spokesman Richard Di Natale, Mr Burgess said the fund held $147 million in tobacco stocks in December last year, and its holdings hadn’t changed significantly since.
”I think the board’s comfortable on that issue,” he said.
Senator Di Natale responded, ”So you’re comfortable that the board has a ‘strong commitment’ to environmental, social and governance issues, and yet … has $147million invested in tobacco? That, in your view, demonstrates a commitment to sound social practices as far as investment goes?”
The fund has, however, dumped shares in 10 companies that make cluster bombs, anti-personnel mines that Australia has banned.
It sold $74 million of the stock this year, which included stakes in weapons-makers such as Lockheed Martin and General Dynamics.
In a letter to the committee, the fund explained the decision by saying it had commissioned ”expert research” to examine whether it should exclude the companies from the fund on the basis of their activities.
Senator Di Natale told The Canberra Times yesterday it was remarkable the fund continued to invest in tobacco and nuclear weapons, while at the same time saying its investment decisions were guided by environmental, social and governance concerns.
”If they’re prepare to invest in those industries, what industries won’t they invest it?
”I think most of the Australian community would say a government that’s working hard on its plain-packaging reforms is undoing a lot of its good work by investing in the same companies that are fighting that legislation.”
The Greens senator said the Future Fund should follow the example of Norway’s giant sovereign wealth fund by using its clout to discourage unethical businesses.
”Norway has already prohibited the investment of tobacco,” Senator Di Natale said. ”The first thing our fund should do is stop investing in entities that produce weapons or tobacco, or that engage in serious and systemic human rights abuses, severe environmental damage or gross corruption.”
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