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The State of Net Zero Investment 2025 report is Australia’s most comprehensive and rigorous picture of investors’ climate progress. It is based on data from 65 of the largest superannuation funds, retail funds, and fund managers active in Australia. They collectively manage approximately A$4.2 trillion of assets on behalf of approximately 15 million Australian beneficiaries.
Progress on Main Indicators
The data shows progress across five of the six key indicators. Only the number of investors with a climate action plan dropped, which is likely due to new minimum regulatory standards for transition plans.
Increasing Appetite for Climate Solutions Investments
Investors’ interest increased across a wide range of climate solutions, with renewable energy and energy storage being the most attractive, and a big jump observed in green infrastructure.
Q: What are the primary opportunities you want to gain exposure to in the near future as part of your climate solutions investment strategy?
Barriers to Investing in Climate Solutions Still Remain
However, investors have reported an uptick in barriers to investing in climate solutions including renewable energy. This reverses positive trends in the two main categories. This report saw a 13pp jump in “Lack of opportunities with appropriate risk/return profiles”, and a concerning 4pp increase policy uncertainty. The multi-year trend of increased numbers of investors nominating “Lack of Government Incentives” accelerated, with a 13pp increase.
Rebecca Mikula-Wright, the CEO of the Investor Group on Climate Change said,
“The Australian investment industry remains focused on the long-term economics; progress on climate is absolutely critical to their beneficiaries’ financial interests, which is an investor’s fiduciary duty. Investors continue to set emissions targets and are spending a lot more time figuring out how to protect against increasing climate damage.
As a result, they’re hungry for attractive opportunities across renewables, battery storage, green infrastructure and transport, and even nature-based solutions.
But it’s a mixed picture in the shorter term: the risk/return outlook for local climate solutions has slipped slightly, and increased policy certainty would help give investors the confidence to deploy funds into Australian growth industries.”
Till Jung, Global Head of ESG at ISS STOXX, Our Report Sponsor said,
“This report helps Australia’s market cut through the noise and focus on the essentials, understanding how investors are engaged in the transitioning of key economic sectors to a low-carbon economy.
The data on investors’ commitments, tools, analysis techniques, and stewardship practices really shows how they’re going to achieve the outcomes that will ultimately protect beneficiaries’ returns from the impacts of climate change.”
About the State of Net Zero Investment Survey
The survey received responses from a total of 65 investors, consisting of 22 asset owners and 43 asset managers, with A$4.2 trillion of assets managed on behalf of Australian beneficiaries. The surveyed investors manage in excess of A$45 trillion of assets globally. 13 of the responders are not IGCC members.
The data was collected in Q4 2024. Based on our ongoing and extensive discussions in the industry, and corroborating reports, IGCC expects that the trends shown in the climate practice indicators (top chart) have continued into the new year.
The report’s lead sponsor is ISS STOXX, and supporting sponsors are Pathzero and JANA. Lonergan Research provided the data collection platform and compiled the data. The Investor Group on Climate Change independently designed the survey and analysed the results.
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Download the Executive Summary