Future Fund says it must consider ‘changing demand for fossil fuels’ as PM attacks the university’s divestment move

This article is more than 5 years old

This article is more than 5 years old

Prime minister Tony Abbott has blasted the Australian National University’s “stupid decision” to get rid of its fossil fuels share portfolio.

The university is offloading holdings in Iluka Resources, Independence Group, Newcrest Mining, Sandfire Resources, Oil Search, Santos and Sirius Resources for ethical reasons.

His comments came as the commonwealth Future Fund indicated it could review its fossil fuel investments if demand for green energy increased.

Future Fund managing director David Neal said his sovereign wealth fund was closely monitoring new energy technology and changing demand for fossil fuels.



“That’s something, that as an investor, we kind of have to worry about,” he told reporters during an investor briefing on Wednesday.



“We expect our managers in thinking about the valuations they put on stocks that have exposure to fossil fuels. We expect them to have regard for the risks of a future changing demand picture.”

The fossil fuel-related shares held by the university represent only 1% of its total investment holdings, or about $16m.

“Of course they should be free to do what they want, but when they make stupid decisions we should be free to criticise them,” Abbott told reporters in Melbourne on Wednesday.

Any entity that refuses to invest in energy companies was depriving its members of a good investment, he said.

“Australia ought to be one of the world’s energy superpowers,” Abbott said.

Treasurer Joe Hockey, education minister Christopher Pyne and assistant infrastructure minister Jamie Briggs have also attacked the move.

ANU vice chancellor Ian Young says his email has “melted down” with messages of support for the stance.

“Although the ANU has been attacked for its decision, we are simply part of a much bigger debate about carbon and carbon pricing,” he wrote earlier in the week.

“If ANU has pushed this debate a small way in this direction we will have acted exactly as a leading Australian, and world, university should.”

On Wednesday, 50 prominent Australians including former Liberal prime minister Malcolm Fraser and former party leader John Hewson put their names to an open letter, published as a full-page advertisement in the Canberra Times, backing the ANU’s stance.

“We cannot understand why a government that is committed to deregulating the university sector would question the ability of a university to make investment decisions,” the letter says.

Hewson warned against bullying from vested interests and said the ministerial interventions were totally unjustified.

“It’s a totally unjustified intervention by government,” he said.

“If I was a superannuation fund manager I would wonder how long it would be before they start instructing us where we should invest our money.”