Future Fund excludes tobacco

The Future Fund will exclude primary tobacco producers from its investment portfolio, its Board of Guardians announced today.

The move follows a review of investments by the board's governance committee announced last October.

The fund's investment portfolio is exposed to tobacco through 14 entities with a value of $222 million at 31 December 2012 (0.3 per cent of the value of the Future Fund).

David Gonski, chairman of the board, said it had noted tobacco's damaging health effects, addictive properties and the fact that there was no safe level of consumption.

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The board had also considered its investment policies and approach to environmental, social and governance issues.

"As a result, the board determined that in this instance it is appropriate to exclude primary tobacco product manufacturers," he said.

The board's governance committee reviewed all aspects of its exclusions policy as it related to tobacco, and also  considered the existing approach to exclusions across its portfolio. No further exclusions were appropriate, it said.

Although the nation-building fund was not exposed to tobacco through the 14 entities, it said the same restriction would apply going forward.

The fund had come under fire for its environmental social and governance policy, or alleged lack of it, by the Asset Owners Disclosure Project (AODP) after it rejected an invitation to disclose its climate change risk strategy based on "resource constraints".