Investors, assemble: Climate League launched

A group of 16 institutional investors with more than $850 billion collective Australian assets under management have launched a 10-year initiative to drive greenhouse gas emissions down by 2030.

The Climate League 2030 will see participants "support and act towards deeper emissions reductions for Australia," with an initial goal of reducing greenhouse gas emissions by a further 230 million tonnes from current projections out to 2030, on a path to net zero by 2050.

Aware Super, Cbus, IFM Investors and the Queensland Investment Corporation (QIC) have joined Climate League 2030 as foundational supporters. The initiative is being coordinated by the Investor Group on Climate Change (IGCC).

"Climate change poses systemic risks to the Australian economy that threatens our prosperity," said Emma Herd, IGCC chief executive officer. "At the same time, we can create $63 billion in new investment opportunities over the next five years, and in turn create good jobs and drive much-needed economic growth, by putting ourselves on a Paris-aligned trajectory."

Institutional investors also participating at launch include Aberdeen Standard Investments, AustralianSuper, Australian Ethical, HESTA, Impact Investment Group, Lendlease Funds Management, Local Government Super, New Forests, Pendal Group, Pollination, UniSuper and the Victorian Funds Management Corporation.

"To really shift the dial and achieve lasting action to halt the potentially devastating impacts of climate change, it is critical businesses, investors and governments alike set and deliver on transparent, meaningful and measurable targets and goals," said Deanne Stewart, Aware Super chief executive officer. "We can do this individually but collaboratively we have the power to do so much more. 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."

Participants are asked to pledge at least one new action each year under three themes:

Integration of Paris-aligned emissions reduction goals into investment policies or business strategies; collaboration between investors, clients and companies to deliver emission reductions; and investment in new clean energy, clean technology and other projects and measures that reduce Australian emissions.

Actions already registered under the initiative include portfolio-wide emissions reduction goals of up to 45% by 2030 and net zero by 2050, engagement programs seeking climate action from companies, and investment targets for renewable energy and other clean technology.

Participants will be required to report annually on their progress and demonstrate how their registered actions have or will lead to absolute emissions reductions in contribution to the 230 million tonnes by 2030 aim. The initiative intends to publish a first progress report in late2021.

"Climate change is one of the most significant long-term risks facing our members' retirement savings," said Kristian Fok, Cbus chief investment officer. "Climate League 2030 is a stretch target guiding investor focus on driving emissions down. This is especially important in Australia given we have a carbon-intensive economy."

Climate League 2030 is launching with institutional investors, but will be opened to banks, insurers and companies over coming months to build "a critical mass of support for Paris-aligned emissions reductions across the financial market."

Earlier this week, IFM Investors released its own outlined plan to target net zero by 2050. The commitment aligns IFM Investors with the goals of the Paris Agreement, and is an extension of its actions on its infrastructure assets.

IFM Investors said it has established a multi-disciplinary taskforce to support the commitment, spearheaded by its investment team. The goal is to establish clear frameworks and policies to guide and support sustainable decision-making processes that are designed to mitigate climate change risk exposure and help meet the net zero by 2050 target.

Read more: Climate ChangeClimate League 2030IFM InvestorsAware SuperCbusIGCCAberdeen Standard InvestmentsAustralian EthicalAustralianSuperDeanne StewartEmma HerdHESTAImpact Investment GroupKristian FokLendlease Funds ManagementLocal Government SuperParis AgreementPendal GroupQueensland Investment CorporationUniSuper
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