Investor sentiment on Australia’s climate policy has significantly improved over the past two years, according to the Investor Group on Climate Change (IGCC) 2023 Net Zero Survey. The yearly survey covers the vast majority of Australia’s institutional capital market, and included 63 superannuation funds, other asset owners and asset managers with more than A$37 trillion AUM globally and over 15 million Australian beneficiaries. Investors were asked to nominate barriers to climate solutions investment in Australia, with 40% citing policy and regulatory uncertainty – a significant drop from 70% in 2021. They were also asked to nominate the policies they thought the government should prioritise, with 56% mentioning 1.5°C sector-by-sector decarbonisation plans, 54% citing improved carbon pricing (54%), and 53% stating funding support for new technology. In addition, investors’ emerging policy priorities included the development of mandatory climate-related disclosures, the implementation of clear timelines for the phase-out of coal, oil and gas by the government, and the emergence of measures to build resilience and adapt to the physical damages of climate change. Renewable energy (47%), biodiversity and nature capital (34%), and energy storage (32%) emerged as the top three areas where investors observed the best long-term returns. “Credible, investible and durable policy frameworks put in place today will support strong investor and beneficiary returns into the future, enhance Australia’s economic competitiveness, and help attract international capital,” said Erwin Jackson, Managing Director for Policy at the IGCC. “Investors look forward to working with governments on initiatives that can incentivise and remove barriers for private sector investment in adaptation across the economy. Through a fair and well-planned transition and climate adaptation, governments can support investment and provide a better life for all Australians: cleaner, greener and healthier communities, and more money to live comfortably.”
