About the Investor Group on Climate Change

The Investor Group on Climate Change (IGCC) is the leading network for Australian and Aotearoa New Zealand investors, helping them understand and respond to the risks and opportunities of climate change. Its members include the countries’ largest superannuation and retail funds, managing almost $5 trillion in assets under local management and $35 trillion globally on behalf of almost 15 million beneficiaries, including more than 14.8 million Australians.

About this document

These policy priorities are designed to meet strategic goals and facilitate capital flow toward a climate-resilient, net zero economy. The priorities align with a five-year strategy term extending to 2030 and will be reviewed before the end of 2028 to ensure they remain fit for purpose.

CEO foreword

CEO Rebecca Mikula-Wright highlights that Australia is currently the fastest-moving climate policy market globally. Treasury modelling indicates that if Australia leans into its renewable advantages, the economy could be 84% larger by 2050. Conversely, a disorderly transition could shrink the Australian economy by up to $2 trillion cumulatively, resulting in $500 billion less investment and electricity prices 54% higher than the baseline.

Our policy track record

Almost all of the 13 core policy priorities for 2022–2025 have been achieved. Key achievements include the establishment of the Climate Change Act 2022, mandatory climate-related financial disclosures, and the development of sector decarbonisation plans and a National Climate Risk Assessment.

Our 2030 vision

The vision is a climate-resilient economy on track by 2030 for net zero emissions in 2050. Failure to act presents significant financial risks, including current annual disaster costs of $40 billion (2% of GDP), projected to reach $73 billion (4% of GDP) by 2060. Investors face a potential 38% lower superannuation return by 2050 in a 3.7° scenario. Conversely, climate action offers an economic upside of 5.1 million new jobs and $68 billion in green exports by 2050.

Our 2030 strategy

The strategy focuses on five strategic themes: accelerating the energy transition, driving down emissions in the real economy, addressing physical climate risk impacts, driving investment in climate solutions, and supporting regional decarbonisation. Key levers include enabling institutional investors and influencing policy makers and corporate decision-makers.

Strategic lever: investors influencing policy makers

This lever aims for outcomes where policymakers engage with whole-of-economy implications, show political will for ambitious policy, and incorporate investor perspectives to enable capital allocation towards a climate-resilient economy.

Our policy priorities

Investors have identified five essential jobs for climate policy to reduce systemic risk, crowd in private capital, and protect long-term economic value in Australia.

1: Strengthen climate laws and governance

To deliver policy certainty, recommended actions include amending the Climate Change Act to require regular reviews of the six sectoral decarbonisation plans and the National Adaptation Plan (NAP). IGCC advocates for Treasury and financial regulators to identify systemic risks through regular stress testing across the financial system. Additionally, the report suggests expanding the Net Zero Economy Authority’s remit and improving transparency to result in phase-out dates for programs that enable fossil fuel expansion.

2: Prepare for a changing climate

To protect assets and long-term value, the report recommends strengthening the NAP with measurable resilience targets and a national adaptation finance strategy. It suggests expanding the mandates of specialist investment vehicles (SIVs) and green bonds to include adaptation, and updating land-use planning regulations and the National Construction Code to consider resilience over the full expected life of assets. Investment in sovereign scientific capability is also prioritised to address key research gaps.

3: Eliminate emissions at double speed

Market failures are currently slowing capital reallocation. IGCC calls for a broader carbon price or reforms to the Safeguard Mechanism, including reducing the participation threshold from 100,000 to 25,000 tCO2. Other priorities include accelerating the energy transition toward 82% renewables by 2030, supporting low carbon liquid fuels (LCLF), and implementing a methane emissions reduction strategy to cut emissions by 30% by 2030 compared to a 2020 baseline.

4: Encourage investment in Australia

To compete for global capital, Australia should introduce a carbon border adjustment mechanism targeting sectors like cement, steel, and hydrogen. Recommendations include overhauling investment incentives for research and development, streamlining regulatory processes such as the Foreign Investment Review Board (FIRB), and phasing out fossil fuel subsidies that distort investment signals to increase budget revenue for decarbonisation.

5: Deliver leadership beyond our borders

Australia is encouraged to work with regional partners to build shared markets for decarbonised products. Priorities include developing a model for an investable Nationally Determined Contribution (NDC) and positioning Australia as a key regional player by strategically deploying climate finance in the Asia Pacific to share expertise and build capacity.

Working with key partners

Effective advocacy involves close collaboration with partners such as the Asia Investor Group on Climate Change and the Maximum Ambition Coalition. IGCC also focuses on the intersection of climate and nature, human rights in the transition, and supporting advocacy for a Circular Economy Act to manage supply chain risk and material scarcity.