Future Fund dumps arms, invests in indigenous estate

What if sovereign investments privileged sustainability over financial returns?

2023 — AUSTRALIA'S sovereign wealth fund has divested stakes in defence and mining companies and will instead direct investment towards indigenous agribusiness.

Following a strategy review, the Future Fund added a new category of ‘environmental order’ to its investment framework, meaning portfolios now need to consider opportunities and risks associated with biodiversity loss and climate change.

In a statement, the fund’s new chair said the Aboriginal and Torres Strait Islander Land and Sea Future Fund would be the key beneficiary of the change, which would receive a A$2bn injection, almost doubling its size.

Returns on the investment will be paid to the Indigenous Land and Sea Corporation to expand the indigenous estate.

“In 2021 the Future Fund reported its best-ever return — 22 per cent. We are taking some of that profit and directing it to our smallest portfolio. We expect strong growth from indigenous food businesses over the coming years.”

The Aboriginal and Torres Strait Islander Land and Sea Future Fund is currently valued at A$2.2bn. By comparison, the Future Drought Fund is worth $4.6bn, and Disability Care $15.5bn.

Analysts said it was a risky move for a sovereign fund: “There’s always going to be more money in conflict and oppression than there is in sustainable agriculture. But I guess, we’ll all need something eat when the wheat crops fail.”

Inspired by
Freedom of Information disclosures from Australia’s Future Fund that reveal it has invested nearly $200m in defence and arms companies including Raytheon Technologies, Northrop Grumman and Lockheed Martin.

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