Australian investors team up to drive deep carbon cuts

Published 03:00 on October 14, 2020  /  Last updated at 03:00 on October 14, 2020  /  Asia Pacific, Australia  /  No Comments

A group of 16 Australian institutional investors have banded together to help drive a 45% drop in national greenhouse gas emissions by 2030, a move that would set the country on a path to reaching net zero by mid-century and cut carbon by 230 million tonnes of CO2e per year beyond the government’s target at the end of this decade.

A group of 16 Australian institutional investors have banded together to help drive a 45% drop in national greenhouse gas emissions by 2030, a move that would set the country on a path to reaching net zero by mid-century and cut carbon by 230 million tonnes of CO2e per year beyond the government’s target at the end of this decade.

The initiative, dubbed Climate League 2030, is being coordinated by the Investor Group on Climate Change (IGCC), and will open up to participation by banks, insurers, and companies over the next few months.

“Institutional investors hold an important stewardship role in our economy that puts us in a unique position to help facilitate an orderly transition to net zero emissions that is aligned with the goals of the Paris Agreement,” said Stephen Dunne, IGCC chair.

“Listed companies are responsible for 40% of Australian emissions, while infrastructure has been connected to 70% of domestic greenhouse gas pollution. Through our universal ownership and management of equities, fixed, and other assets, investors can help ensure real-world emissions reductions through our portfolio decisions, management, and company engagement,” he said.

The founding companies, which manage a collective A$850 billion ($609 bln) in Australian assets, have committed to integrating emissions targets aligned with the Paris Agreement into their investment policies or business strategies.

Climate League 2030 aims to achieve major carbon cuts through collaboration between investors, clients, and companies, driving investment in new clean energy, clean technology, and other projects.

The founding members include major institutional investors Aware Super, Cbus, IFM Investors, and the Queensland Investment Corp.

They also count New Forests and Pollination, both already involved in carbon offset markets with a focus on nature-based solutions.

A report released by IGCC earlier this week estimated that a climate target in line with the overall goals of the Paris Agreement would create investment opportunities worth A$63 billion over the next five years for Australian investors, with more than half of that related to carbon sequestration, some three times more than under the government’s current climate policies.

Participants in the new initiative will report annually on their activities and how those contribute to meeting the 230 MtCO2e target. The first reports are due in late 2021.

By Stian Reklev – stian@carbon-pulse.com

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