A newly released, in-depth report by The Investor Group on Climate Change sets out key priorities that will help unlock the necessary investment in regional climate transition.
The report, Investing in Australia’s Vital Regions, is based on consultation with many of the country’s major superannuation funds and fund managers and sets out recommendations for both investors and for policy-makers on how to support investment in:
- new green export industries,
- multi-user infrastructure to support new industry growth,
- decarbonisation of ongoing industries, like manufacturing and agriculture
- regional emissions-neutral sectors, like tourism, education and healthcare, and
- the necessary social infrastructure and services to support a thriving community around major industries.
Selected actions for policy-makers
- Develop investment grade transition plans for emissions-intensive regions and priority industries. These must be co-designed with affected communities and workers.
- Ensure the new national Net Zero Authority acts as a ‘front door’ for investors with government, with information-sharing and convening functions.
- Support key foundations for business growth in the regions, including workforce planning, liveable regional communities, access to growth markets, and multi-user infrastructure
- Provide targeted financial support from public institutions like the CEFC, ARENA and the National Reconstruction Fund, that includes taking on higher risk, earlier stage investments in priority regions and industries.
Selected actions for investors
- Include ‘just transition’ objectives in net zero strategies, and report on progress.
- Broaden their definition of ‘climate solutions’ beyond renewables, so that investments of the types above can contribute to their climate commitments.
- Encourage investee companies that are in the process of closing emissions-intensive assets to ensure strong outcomes for workers and communities.
- Design investment mandates that co-target just transition outcomes and commercial financial returns, where such investments are in their members’ best financial interests.
IGCC Managing Director of Policy, Erwin Jackson said:
“Australia’s successful path to net zero goes through a handful of critical regions that have hosted our heavy-emitting industries.
“Institutional investors currently struggle to identify opportunities in transition regions that meet their capital allocation criteria.
“Those regions do have a great future: By 2035 we could see thriving green iron production, clean energy exports, and a host of innovative new businesses, but that requires clear policy signals and confident investment now.”