It’s Time to Re-think Investment on the Road to Net Zero

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Josh Martin Director, Sustainability Solutions - APAC
Green Finance
Net Zero
Decarbonization

Recently Josh Frydenberg issued a warning that should send a chill through many sectors of our economy. The country’s Treasurer said Australia needs to set a net zero commitment now or we will risk capital markets increasing their borrowing costs and placing a financial burden across a range of our sectors. A failure to act will also likely result in Australia and the world experiencing the worst outcomes of climate change in our lifetimes.

Organizations on both sides of the Tasman have been escalating decarbonization ambitions as investors, boards, and executives increasingly view climate change as both a moral and financial risk, as well as a sustainable opportunity to rebuild the nation as we emerge from the pandemic. The Task Force on Climate-related Financial Disclosures (TCFD) in particular has helped businesses in Australia understand that climate change poses a financial risk to the global economy.

The number of ASX200 listed companies with Net Zero emissions targets soared to 49 in the year to March 2021, with AGL Energy, AMPOL, Coles and Origin Energy joining the ranks. In fact, more than half of the market capitalization of the ASX200 is now covered by Net Zero commitments.

The sentiment is promising, but as we head into 2022, the focus will be on how many of these companies turn intent into action. Understandably, as 2020 wrought havoc across the world, a lot of businesses went into financial survival mode and bold decarbonization targets fell by the wayside.

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