An Australian non-profit organization, the Australian Conservation Foundation, has examined Australian government investment funds to determine the extent to which environmental, social and governance (ESG) concerns are being taken into account.
The report finds wide variance among Australian states and territories. Some government funds, such as in NSW, South Australia and Western Australia do not seem to take ESG concerns into account when investing. These result in a number of cases of policy incoherence: investments that seem to be in contradiction with a government's policy goals.
For example, a number of states have invested in uranium-related equities, despite legislative or political bans on uranium mining. Moreover, all jurisdictions have put money into the fossil fuels industry, while also making wide-ranging commitment to reduce greenhouse gas emissions.
While Austrialian governments manage some A$ 206 billion in total assets, only the A$ 52 billion in listed Australian shares are taken into account by the study. Asset classes other than Australian equities (i.e., unlisted or private markets and fixed-interest assets) were not examined because of a lack of available information.
Overall, Australian governments could do much more to ensure that best practices are followed by government investment funds, such as the United Nations Principles for Responsible Investment, say the report's authors. Governments could also be more transparent, "including regular and full disclosure of their investment processes and holdings."
The full report, Responsible Public Investment in Australia, is available on-line at: http://www.acfonline.org.au/uploads/res/govt_investment.pdf
