The State of Net Zero Investment is the Investor Group on Climate Change’s (IGCC) annual benchmark report analysing how Australia’s institutional investors are responding to climate change. The 2025 edition is based on survey responses from 65 firms — 22 asset owners and 43 asset managers — managing AU$4.2 trillion on behalf of Australian beneficiaries. The report is structured around the Investor Climate Action Plan Expectations Ladder (ICAPs) focus areas: Investment, Corporate Engagement, Policy & Advocacy, Disclosure, and Governance, with an additional chapter on Physical Climate Risk and Resilience.

Key findings include: over three-quarters of respondents have publicly committed to a net zero by 2050 target; 72% have established interim targets for at least part of their portfolio; and almost all asset managers (93%) and asset owners (95%) report integrating climate risks and opportunities into general investment practices. Whole-of-portfolio physical climate risk assessment rose sharply from 16% in 2023 to 43% in 2024, and 60% of investors conducting such assessments have implemented a response. Nearly 90% of investors apply dedicated strategies to address fossil fuel investments, and 89% engaged in climate finance-related policy advocacy in 2024.

The report identifies six focus areas to drive faster progress: (1) strengthening climate policy frameworks; (2) translating investor interest into capital deployment at scale; (3) mobilising private investment in adaptation solutions; (4) adopting systems stewardship to drive real-world emission reductions; (5) providing further regulatory guidance on mandatory disclosures; and (6) scaling global climate finance to Emerging Markets and Developing Economies (EMDEs). The report also notes that levels of climate transparency and disclosure of climate action plans have plateaued, partly attributed to a “wait and see” approach ahead of Australia’s mandatory climate disclosure obligations taking effect.

• Renewables (solar, wind, hydro) remain the top investment opportunity at 63% of respondents (up from 47% in 2023)
• Policy and regulatory uncertainty remains the second-largest barrier to climate investment, cited by 44% of investors
• Only 35% of asset managers and 23% of asset owners are allocating capital to climate solutions in Emerging Markets and Developing Economies
• 54% of investors have a climate transition plan; 35% have made it publicly available