If this current Australian summer of bush fires should be teaching us anything, it’s that climate inaction is expensive.

There are few Australians who have not been personally touched by the impacts of these fires, directly or indirectly through their friends, families, colleagues or others. As a result, this decade already feels dramatically different to the last, with wide reaching ramifications for investors.

Column inches have been dedicated to the extent and breadth of the damage caused, both personal and economic, but the true and full costs will take time to fully reveal themselves.

Agricultural industries have taken a massive hit, with wine producers likely to dump a vast proportion of their grapes as just one example; damage to homes and infrastructure will require a long rebuilding process; and of course, the wide repercussions on the impact on our tourism sector – to name just a few.

But it’s the compounding impact of natural disaster after natural disaster that really challenges the resilience of the Australian economy and natural environment. Bush fires, hail storms, floods, on top of extended drought – all with increased frequency, severity and longevity – are forcing a reconsideration of how we as a nation respond to the conditions that a changing climate is amplifying.

The penny is dropping across business, the community and finance sector that we really are facing a new normal operating environment where summers are not just for leisure but for risk management, and where a fresh assessment of the full risks faced by Australian investors is necessary.

This is unprecedented, but unfortunately, well foreshadowed.

Our financial sector regulators, for example, have put much effort in the last year to lift the bar on the expectations of our sector in the management of climate risk. It would be a brave board to not have climate resilience on their risk agenda, whether that be super fund trustees, insurers, banks or other listed company boards.

But it’s not just regulators who have shifted gear.

Already in 2020, this very personally effecting bush fire season is revealing just how many Australians are impatient for change and making direct links between the impact of a changing climate to the severity of the fires. Unprecedented numbers of Australians are looking to their superannuation and banking as a way to “do something” in response to climate change.

Since the onset of the bushfires, we have witnessed a surging number of people seeking how to align their investments with investing in a lower carbon world and avoid fossil fuels. RIAA’s Responsible Returns online tool has seen searches on these topics surge, across super, investment and banking, tracking thousands of Australians seeking out investment options that take stronger action on climate change.

Far from an irrational response to an emotional summer limited to just Australia, Larry Fink’s annual letter signals clearly that the sentiment of the global finance sector has shifted, with a clear statement that Blackrock will begin the process of removing capital from assets highly exposed to climate risk. Fink’s view may do more to reset this debate from one of ethics and values, to one of risk and opportunity than many of us have achieved after years of working in this sector.

We are seeing many strong responses underway: in the world of responsible investment, super funds are assessing their climate risk exposures, establishing low carbon strategies, scenario testing their portfolios, stepping up voting practices on climate resolutions, co-filing resolutions, joining initiatives such as Climate Action 100, and removing capital from highly exposed carbon intensive sectors. The Australian Sustainable Finance Initiative is one example of such activity, as a unique financial services collaboration that is working with over 80 finance organisations to set out a clear pathway for the full sector to respond to exactly these issues, with a roadmap due in the first half of this year.

But still too few are setting hard targets (RIAA’s 2019 Super Study found that only 25% of leading 50 super funds have any responsible investment performance targets), too few have climate deeply embedded in the core governance of their funds (only 10 of 50 funds have climate as a standing board agenda item and only 8 funds are referencing TCFD), and for consumers who increasingly want to know exactly where their hard earned money is being invested, only 7 out of those largest 50 funds disclose their portfolio holdings.

The combination of factors – regulators moving to supervising climate risk management; climate related impacts putting very real value at risk across listed and unlisted assets; and our members and customers more willing than ever to move their money – means that as we start this decade, to not take action is no longer an option if we’re to serve the best interests of our beneficiaries and protect their future.

As we enter this new decade, the game has changed. BlackRock’s Larry Fink called it out as being on the edge of a fundamental reshaping of finance. This is not overstating where we sit today.

The window for inaction, for hiding behind uncertainty, or for policies and commitments that aren’t supported by strong action, is rapidly shutting, or indeed may already have closed

Simon O’Connor is the chief executive of the Responsible Investment Association Australasia (RIAA)

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