Overview

State of Net Zero Investment is an annual benchmark series that tracks the climate-related investment practices of institutional investors in the region. Produced by the Investor Group on Climate Change (IGCC), the leading network for Australian and Aotearoa New Zealand investors, the report covers portfolios affecting more than 14.8 million Australians. The 2026 edition provides an in-depth analysis of $3.5 trillion in assets under Australian management, based on a survey of 55 major institutional respondents. This cohort includes large-scale superannuation funds, retail funds, and global asset managers with significant local operations, offering a representative snapshot of capital market trends and climate risk management strategies.

Purpose

The report is designed to provide a factual baseline for tracking how institutional investors are managing the transition to a net-zero economy. It exists to identify the evolving barriers to climate-aligned capital allocation and to inform the decisions of policymakers, business leaders, and finance professionals. Specifically, the series helps bridge the gap between high-level net-zero commitments and practical execution by highlighting the systems, processes, and governance structures required for credible transition plans. It also aims to clarify the impact of newly legislated mandatory disclosure standards, such as AASB S2, and identifies where policy uncertainty or structural market issues may be impeding the flow of private capital into essential climate solutions and renewable energy infrastructure.

Methodology

The analysis is based on an annual survey of institutional investors active in the Australian market. The FY26 survey was distributed in September 2025, with responses collected through January 2026. The methodology incorporates a mix of open and closed questions covering corporate engagement, physical risk assessment, and investment barriers. The survey design is reviewed annually against the Net Zero Investment Framework 2.0 (NZIF 2.0) and is further informed by the Investor Climate Action Plans (ICAPs) Expectations Ladder and the Transition Plan Taskforce (TPT) Disclosure Framework. Data collection is handled independently by Lonergan Research, while IGCC staff perform the analysis on aggregated, self-reported data. The report is structured into core areas including Governance and Investor Practice, Corporate Engagement and Stewardship, and thematic sections covering the Energy Transition, Regional Decarbonisation, and Physical Risk.

Use for Finance Professionals

Finance professionals can utilise this report to benchmark their organisation’s climate practices against industry peers, particularly regarding board-level oversight and the integration of climate risks into financial decision-making. The report highlights that more than two-thirds of asset owners have now formally incorporated climate responsibilities into their board charters, providing a standard for governance excellence. Professionals can also gain insights into shifting stewardship trends, such as the rise of systemic stewardship and engagement across entire value chains. The document identifies specific investment opportunities in climate solutions—including energy storage, green property, and low-carbon transport—while outlining the risk-return profiles that currently affect capital deployment. Furthermore, the inclusion of case studies on real-world decarbonisation and transition readiness provides practical examples of how to apply forward-looking metrics within diverse investment portfolios.