A range of investors have backed independent MP Zali Steggall draft climate change law in testimony to a parliamentary inquiry.
A broad swathe of businesses, conservationist, scientist, health professionals and investors have broadly backed the proposed Climate Change (National Framework for Adaptation and Mitigation) Bill 2020, which would legislate a 2050 net zero emissions target for Australia.
"Globally, countries are setting clear long term targets on emissions reductions, supported by clear trajectories to get there," said Simon O'Connor, CEO of the Responsible Investment Association Australasia. "This has led to a significant increase in companies and investors setting their own targets towards the achievement of net zero by 2050, consistent with the global direction of travel as set by the Paris Agreement.
"Furthermore, investors are increasingly being required to manage for climate risk, as regulators globally see this as a critical investment risk, that has potential to threaten economic stability and financial stability, and so our members are being required to report on how they manage for climate change."
This is being hampered in Australia by the lack of "clear long term direction" and a "coordinated national climate change policy suite," O'Connor said.
O'Connor noted that while investment in low carbon opportunities is happening in Australia, it is less than it could be because it is flowing offshore. He cited modelling by the Investor Group on Climate Change (IGCC) that shows $43 billion less investment in low carbon solutions out to 2025 because of current policy settings.
Nicolette Boele, executive manager of policy at RIAA noted that the responsible investment sector could deliver stronger results "by working hand in hand with policy makers and regulators" and cited financing infrastructure required to build longer-term resilience and adaptation to climate change impacts for Australian communities.
"In our submission, we've pointed out a few improvements, but overall, these proposed laws, if enacted, would deliver what the community expects, make investing less risky, lessen the shock to certain Australian industry sectors whose goods are no longer consistent with key trading partner sovereign laws, and allow the investment community to do the heavy lifting to invest in the industries that will drive significant economic activity and create jobs for Australians," Boele said.
Tim King, CIO of Melior Investment Management, noted that the firm had made a submission in support of the proposed laws.
"The most important point is that you need a target," King said. "The government has the Technology Roadmap, which is a useful discussion of the technologies to drive emissions down, but you actually need a target to show a pathway for how you're going to get there. That's the most important part. Set the pathways, and then we can work out what technologies are the most optimal to achieve that target."
King noted that around 15% of the ASX300 have net zero targets already, and policy settings can drive investment to solutions to avoid "catastrophic climate change."
"The capital costs of existing tech such as large-scale renewables is plummeting and becoming feasible, and a whole new raft of tech such as green hydrogen and batt technology is enhancing our ability to meet the target," he said. "We don't have a choice and given the economics and new technologies, yes it's absolutely achievable."
The Australian Industry Group, the Business Council of Australia, the Planning Institute of Australia and the Property Council of Australia have all expressed support for Steggall's bill.