Investors back push for stronger climate action

The new Climate League is backed by investors that have over $850 billion under management 

A group of Australian investing and super fund heavy weights are coming together to push for bolder action on climate change, aiming to reduce annual greenhouse gas emissions to net zero by 2050. 

Launched on Wednesday, the Climate League 2030 is backed by 16 institutional investors who collectively have over $850 billion of Australian assets under management. 

The group has been coordinated by the Investor Group on Climate Change (IGCC), with participants including Aware Super, Cbus, IFM Investors and the Queensland Investment Corporation.  

Participants have been asked to support a further reduction in Australia’s annual greenhouse gas emissions of at least 230 million tonnes on top of what is already projected by 2030. 

Under the current emissions reduction targets set by the Morrison government, pollution will be only 4 per cent lower in 2030 than today.

Those backing the Climate League  will need to commit to at least one new action a year around integrating Paris-aligned emissions reduction goals into investment policies or business strategies; getting investors, clients and companies to collaborate on lower emissions; or investing in clean energy and technology projects. 

While members are responsible for their own actions, they will be required to report annually to demonstrate how their actions have or will lead to absolute emissions reductions to contribute to the 2030 target of 230 million tonnes.   

Aware Super CEO Deanne Stewart said if lasting action on climate change was to be achieved, businesses, investors and governments had to come together to set meaningful, transparent, and measurable goals.  

“We can do this individually but collaboratively we have the power to do so much more,” Stewart said.  

She said that Aware Super had already made traction on the issue by publishing a climate change portfolio transition plan that set out goals and targets for reducing the company’s footprint. 

“We know that climate change poses the most significant financial risks and opportunities to Aware Super’s portfolio in the long term, and most importantly to our members’ future economic security,” She said. 

Mark Carney, the former Bank of England governor and current United Nations Special Envoy on Climate Action and Finance, has also backed the project, saying that the $3.5 trillion super industry gave “significant influence” in taking real action on climate change.  

“This is especially important as achieving net zero emissions by 2050 will require a whole-of economy transition and every company, bank, insurer and investor will be part of that,” Carney said.  

“The investment and innovation necessary for this shift will also create the greatest commercial opportunity of our time and support a post-COVID green recovery.” 

While the Climate League 2030 is only open to institutional investors at the moment, it will be opened to banks, insurers and companies over the coming months. 

IGCC chair Stephen Dunne said that with listed companies responsible for 40 per cent of Australian emissions, and infrastructure connected to 70 per cent of domestic greenhouse gas pollution, it was critical they do their part.  

“Climate League 2030 is a clear demonstration of the important role the private sector can and will play in meeting our national climate change challenge,” Dunne said.  

“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.” 

The initiative intends to publish a first progress report in late-2021.