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Investor ‘Climate League’ Seeks to Boost Australia Carbon Cuts

Investor ‘Climate League’ Seeks to Boost Australia Carbon Cuts

A group of 16 institutional investors controlling A$850 billion ($609 billion) in assets is seeking to speed up Australia’s emissions reductions.

The Climate League 2030 initiative will promote investment in clean energy and technology toward a goal of reducing emissions by 45% from 2005 levels by 2030, beating the pro fossil-fuel government’s commitments under the Paris Agreement. Members include the country’s second-biggest pension fund, Aware Super, and big money managers such as Queensland Investment Corp. and IFM Investors.

Government projections in 2018 suggested Australia was at risk of missing its Paris target to cut greenhouse gas pollution by 26% to 28% by 2030. Prime Minister Scott Morrison has said the goal will be met comfortably, although he’s refused to put a price on carbon to help meet it and steered clear of setting longer-term climate targets.

“Investors are increasingly recognizing that climate risk is investment risk,” said Mark Carney, UN special envoy on climate action and finance, and former Bank of England governor, in a statement to accompany the announcement. “The Australian pension industry is the fifth largest in the world. This gives it significant influence on companies and signals support for Paris-aligned, economy-wide emissions reductions.”

Morrison’s government is pursuing a technology-based approach to reducing carbon pollution, while also promoting a “gas-fired” economy recovery from the coronavirus pandemic. Groups such as the Investor Group on Climate Change, which is a co-ordinator of the initiative, have said that favoring gas instead of renewables means the country could miss out on billions of dollars of clean energy investment.

Participants in the program will develop their own actions for reducing emissions, but will be required to disclose quantifiable results. A progress report on their collective contribution is planned for late 2021.

©2020 Bloomberg L.P.