Australia’s climate policy is again firming as a political battleground, potentially increasing uncertainty for investors.
- Prior to 2022, Australian institutional investors had typically cited uncertainty on climate policy as the main hurdle to allocating to climate-aligned opportunities.
- Progress on climate policy under the Albanese government has brought Australia closer in line with global peers and provided more certainty for investors.
- Recent key publications signal a step up in Australia’s climate ambition. We therefore expect future climate policy to evolve accordingly.
- However, the Coalition’s recently announced intent to abandon Australia’s 2050 net zero target has revived debate around climate policy going forward.
- International climate policy settings will also naturally influence the investment environment and should be considered in conjunction with domestic policy.
The purpose of this paper is to provide an update on recent Australian climate policy developments and consider the possible implications for investors. Frontier continues to undertake research to support our clients manage material climate-related financial risks and opportunities, including a future planned enhancement of our manager assessment approach relating specifically to decarbonisation and net zero. We always welcome client feedback and discussion on the topic of climate change. Reach out to a member of your client team or Responsible Investment Team to learn more.
