Climate change is a systematic risk to investment returns, financial stability, communities and economies. The decisions that governments, investors, companies and individuals make today will have a material impact on the superannuation returns of millions of Australians and New Zealanders.
A managed transition to net zero emissions and actions to build resilience to the impacts of climate change will reduce the cost of climate change and open up investment opportunities. It will help ensure that when people retire they can do so with dignity.
Long-term investors have a critical role in delivering this more prosperous future and are increasingly changing their investment practices to align with a net zero emissions economy.
However, investors can’t do this alone.
Governments have an obligation to implement policies that are credible, durable and predictable. This will reduce financial risks and encourage investment in low and zero carbon opportunities.
From an investor perspective, there are three core policy areas and specific actions that need to be prioritised by the Australian and New Zealand governments:
- Pathways to a net zero emissions economy: Paris Agreement-aligned national emissions and economic strategies, durable policy frameworks and carbon pricing
- A managed energy sector transition: The credible integration of climate change and energy policy, using public sector finance to crowd in private sector investment, and the implementation of strategies to support a just transition in the energy system
- Building resilient community and economies: National climate change adaptation strategies and strengthened climate-related disclosure requirements for companies and investors.
The Investor Group on Climate Change will continue to work with governments and with investors to pursue a policy response that delivers a prosperous economy.