Future Super will employ negative screens to remove "harmful activities like tobacco, gambling, live animal exports, armaments and fossil fuels" from the portfolio.
"Our positive screening process ensures Future Super actively invests in exceptional companies whose activities are making our world a better place," the Future Super website stated.
Mr Sheikh said that "until now" it has been difficult to avoid super funds that invest in coal and coal-seam-gas.
Future Super director and investment committee member Jemma Green, who is a former vice president of JP Morgan, said the fund would be the first to screen out fossil fuels.
"As some who’s led risk evaluation for global investment banks, I believe that fossil fuel business valuations are based on a fundamental error. With global trends towards the divestment of fossil fuels, the risk of these assets becoming stranded is significant," said Ms Green.
"But it’s more than just avoiding damaging companies. We’re also actively seeking investments that have long-term positive impact such as renewable energy and low carbon technology."
The Future Super board also includes Adam Verwey, who has nine years of experience at Australian Ethical; James Thier, who founded Australian Ethical; in-house GetUp! lawyer Jane Wilder; and CAER senior analyst Julie Leske.
