The Western Australian government pension fund will reduce its exposure to Russian companies with close ties to the Putin administration.
WA’s Government Employees Superannuation Board (GESB) owns stakes in 20 Russian-domiciled companies, according to public records.
These include oil and gas companies Rosneft and Lukoil, state-controlled energy giant Gazprom and Sberbank, Russia’s largest state bank.
Rosneft has been identified by several global media as the Russian military’s main fuel supplier.
Its chief executive Igor Sechin, one of Russia’s most powerful oligarchs and a close ally of Vladimir Putin, is among those subject to sanctions under the consolidated list maintained by the Ministry of Foreign Affairs and Trade .
More than 400 Russian individuals and entities have been added to DFAT’s list since the invasion of Ukraine last week.
A GESB spokeswoman said on Thursday the fund had very low exposure to Russian investments, representing less than 0.1% of total assets.
GESB has approximately 240,000 public sector members and more than $36 billion in total funds under its management.
She said GESB’s investment managers reduced their exposure “before and after” the Russian invasion of Ukraine.
“The GESB board has actively discussed and reviewed recent events and supports the approach taken by the appointed investment managers to reduce exposure and divest where possible,” she told the newspaper. ‘APA.
Market Forces executive director Julien Vincent said the investment was “staggering” given that revenue generated by Russian oil and gas giants underpinned the invasion of Ukraine.
“GESB’s current international equity portfolio shows exposure to twenty large Russian companies, including five of the largest oil and gas companies and several now sanctioned banks,” he told AAP. .
“The Russian state is heavily dependent on oil and gas companies for its revenue – companies that should already be subject to investor exclusions on the grounds that their business models are causing the climate crisis.”
British oil and gas giant BP said this week it would take a hit of up to $35 billion if it offloaded its 19.75% stake in Rosneft.
Australia’s sovereign wealth fund Future Fund and the country’s second-largest superannuation fund, Aware Super, also said they would shed Russian assets.
GESB’s environmental, social and governance policy identifies human rights as one of the key factors to consider during the investment process.
Debarring a company from investment is “usually a last resort” depending on whether its assets are likely to directly cause human death, significant and irreparable environmental damage, gross inequality in society, or breach of law .
A spokeswoman said GESB’s investment managers were required to comply with the fund’s ESG policy, but “a whole range of considerations” were made regarding investment decisions.
Its responsible minister is Prime Minister and Treasurer Mark McGowan and it is chaired by Jo Gaines, the Prime Minister’s former deputy chief of staff.
Australian Associated Press