Stronger NSW 2030 emissions reduction goal signals increased investment opportunity

29 September 2021

The NSW Government has announced it will halve emissions below 2005 levels by 2030. Following the announcement, Investor Group on Climate Change CEO, Rebecca Mikula-Wright, said:

“The commitment by the NSW Government to halve emission by the end of the decade will create a strong signal to capital markets and support attracting billions in fresh investment in clean industries and infrastructure.

“Governments and investors around the world recognise that setting credible 2030 targets and pathways to net zero by 2050 is an investment decision. Institutional investors are hungry to capitalise on near-term opportunities to find market value and continue to generate sustainable returns for their beneficiaries and clients.

“The announcement from the NSW Government aligns with global capital market realities and will support investment in new jobs and net zero industry in the State.

“Australia’s largest states are increasing their climate ambition in line with our major trading partners in the G20, including the US, Japan, Canada and the European Union. (Figure below).

“The emerging gap between Australia’s current 2030 emissions targets and mainstream global investor practice, and company commitments to action, is a concern to institutional investors.

“Markets that do not match 2030 and 2050 net zero targets of major trading partners will become less competitive in attracting international investment into their economy and industries.

“Climate change is now widely recognised as a material risk for investors. A recent IGCC survey of investors found that climate policy uncertainty is a key barrier to investors. Strong climate policies in Australia could unlock $131 billion of fresh investment and job opportunities by the end of the decade.”

Investors are looking to governments in Australia too:

  • Commit to stronger Paris aligned 2030 emissions reduction targets
  • Set a net zero emissions commitment by 2050 with clear transition policies for each segment of the economy
  • Commit to phase in mandatory climate-risk disclosures to match best practice and support unlocking trillions in private capital looking for green investment opportunities in Australia

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