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Australia risks squandering a $63bn opportunity if it fails to commit to net zero

  • August 18 2021
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Australia risks squandering a $63bn opportunity if it fails to commit to net zero

By Cameron Micallef
August 18 2021

Australian and New Zealand investors are responding to climate risk through net zero investments, but a lack of government policy and initiatives is seeing opportunities squandered and capital moved offshore, new research has revealed.

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Australia risks squandering a $63bn opportunity if it fails to commit to net zero

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  • August 18 2021
  • Share

Australian and New Zealand investors are responding to climate risk through net zero investments, but a lack of government policy and initiatives is seeing opportunities squandered and capital moved offshore, new research has revealed.

ESG

A report released by the Investor Group on Climate Change (IGCC) has revealed that 70 per cent of investors with funds under management totalling more than $3.1 trillion believe policy uncertainty is a key barrier to investing in an environmentally friendly way – up around 30 per cent on last year’s survey.

According to the IGCC, the hesitancy is due to a lack of government support, with Prime Minister Scott Morrison refusing to “sign a blank cheque” and commit to net zero by 2050.

As such, local investors are adopting a ‘wait and see’ approach when it comes to investing ethically at home, while others are simply moving their capital offshore.

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“The Australian government’s policies remain predominantly focused on guiding taxpayer investment; however, what is even more important is developing a climate and energy policy framework that ensures private capital is deployed at scale in net zero and climate resilient investments,” the report found.

Without a climate and energy policy, Australia stands to lose a $63 billion opportunity, the report warned.

As such, the IGCC urged for a credible national framework to achieve net zero across the economy.

“The Australian government’s current policies are not a substitute for a coherent national climate policy framework for the entire economy,” the IGCC said.

“More credible 2030 emissions targets, a clear goal for net zero emissions by 2050, and the implementation of an investable climate-related financial disclosures regime are needed.”

Despite facing the headwinds of the government, the report highlighted an increase in environmental investing in Australia.

“Over 40 per cent of respondents have made portfolio-wide commitments to net zero emissions by 2050, up from 27 per cent in 2020,” the IGCC concluded.

Australia risks squandering a $63bn opportunity if it fails to commit to net zero
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

author image
Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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