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Australia risks being left behind as global capital markets pour trillions of dollars into net zero investment opportunities, HESTA CEO Debby Blakey last week warned in a speech to the Global Race to Zero Summit.
Ms Blakey said global capital markets are proactively weighing up climate change risks when making major investment decisions. But Australia could miss out if it is perceived by global investors to be too slow to decarbonise.
HESTA is calling on the Australian Government to legislate a net zero by 2050 target and to spell out clear steps to achieve that target – or risk missing out on a lucrative wave of ‘green foreign investment’.
“Those countries and companies that set the right targets and clear strategies to achieve them will be at the front of the investment capital queue,” Ms Blakey said.
The Investor Group on Climate Change (IGCC) estimates that if Australia adopted Paris-aligned 2030 goals and committed to net zero, it could unlock $131 billion[i][i] in additional investment and job opportunities over the course of this decade.
“Global capital is sending clear signals that Australia is only just starting to heed. The costs of being a global laggard on climate change are only going to grow as the pressure for action increases,” Ms Blakey said.
“As Australian super funds are invested across the Australian economy, this will impact our members’ investments and their financial futures.
“Our country’s more than $3 trillion superannuation industry represents an incredible national advantage in positioning Australia for a low-carbon future. Institutional investors have the long-term investment focus and the skills and experience in regional investing to support sustainable job creation and to help communities transition.”
Like other global investors, Australian superannuation funds are moving rapidly to manage the climate risk and invest in transition opportunities.
Recent IGCC research of its Australian and New Zealand institutional investor member base found 40 per cent have portfolio-wide commitments to net zero and another 40 per cent have plans to implement this goal.
HESTA was the first major Australian superannuation fund to commit to reducing absolute carbon emissions across its entire investment portfolio to net zero by 2050 and to achieve a 33 per cent reduction by 2030.
Ms Blakey said the lack of Paris-aligned short, medium and long-term national emissions targets was hindering investment and damaging investor confidence to deploy more long-term capital towards domestic renewable infrastructure.
“Investment capital goes where there is certainty and stability, and Australia’s ad hoc policy approach is not helping to encourage investment nor foster innovation,” Ms Blakey said.
“We want to invest more in Australian renewables, but the current policy framework means for every $1 we commit to Australian renewable infrastructure assets, we have $3 invested overseas.
“Australia has much to gain from taking a leadership position in the global push to decarbonise. Investors and business aren’t waiting to map their course to net zero. If we’re to cut emissions in time to save us from the worst of climate change, the time is now for government and policy makers to catch up.”
