Greg Combet

The incoming chair of the Future Fund Board of Guardians, Greg Combet, said there needs to be significant government and private sector collaboration when it comes to achieving net zero emissions, but has refused to comment on what role the $211 billion sovereign wealth fund may play in the process.

Addressing the National Press Club on Tuesday in one of his last appearances as head of the federal government’s Net Zero Economy Agency, Combet said both public and private sector investment in utility and infrastructure projects was needed to achieve net zero goals. These could be wide-ranging from water desalination and solar farms to critical mineral refineries and green metal manufacturing facilities. 

“Ideally, institutional investors and private capital would see the opportunities in them, make commercial judgments and invest,” said Combet, who was previously a Labor minister as well as chair of both Industry Super Australia and IFM Investors.  

“The economics of quite a few of these projects are certainly challenging from a private investment standpoint, and they’re far from straightforward to reach a final investment decision.  

“With particularly large transformational projects, my own view is that governments may need to consider being significant equity players helping to de-risk projects and adopting a long-term view before recovering capital.” 

This consideration needs to be done in a “disciplined and rigorous way” that is fitting for any kind of taxpayer-funded initiative, he said. 

No prognostication 

However, when a question from the floor suggested the Future Fund – which Combet will chair from June, replacing ex-Liberal treasurer Peter Costello – was the perfect vehicle for such institutional capital flows to green projects, he declined to “prognosticate upon such a thing.”

“Going to the Future Fund, obviously I take it very seriously that it’s got an investment mandate that government has determined,” he told the crowd in Canberra.  

“Going in as chair of the Future Fund, that’s what I have to deliver, and that’s all I’ll be focused on.”  

The comment may dash the hopes of some activists who had anticipated Combet’s appointment may have turned the sovereign wealth fund may become an ESG investing powerhouse, given his longstanding interest in climate politics.

The Greens – which have long been public critics of the Future Fund due to its investment in fossil fuel – called for Combet to “do the right thing” and make environmental impact an explicit objective of the fund.  

Future Fund CEO Raphael Arndt expressed similar sentiments to Combet previously, urging the government against complicating its mandate and stressing that the fund is already one of the largest investors in renewable energy and seriously considers investment stewardship. 

Combet’s address followed the introduction of the Net Zero Economy Authority Bill to Parliament last week. To promote an orderly economic transformation as the world decarbonises, the bill will enable the transition of the current interim Net Zero Economy Agency to a standalone statutory authority.  

Combet said on Tuesday that the bill doesn’t have a sunset clause for the authority, but there’s a possibility for future governments to reconsider its existence upon the completion of net zero objectives.

“The most vital thing I’ve learnt is the importance of values to guide the way we go about change,” he said. “Respecting people, ensuring fair treatment, aiming at equitable outcomes, generating a commitment to common purpose.” 

“We have endeavoured to embed these values in the new authority. 

“The Treasurer has said that the net zero transformation will define the decade. It may even define this century.” 

Join the discussion