Climate risk continues to be one of the key issues for investors and companies as the momentum in the transition to net zero carbon accelerates. Capital expenditure required to finance lower carbon emissions is a staggering US$275 trillion by 2050 or US$9.2 trillion annually, according to estimates by consultant McKinsey, providing ample investment opportunities for investors.

“Discussing how to move forward to net zero is an important issue for investors and companies,” said Louise Davidson, chief executive officer of the Australian Council of Superannuation Investors (ACSI), ahead of the association’s annual conference at the end of July.

Happening in Melbourne on July 28, ACSI’s annual conference will kick off with a discussion with Mark Carney of Brookfield Asset Management and Conexus Financial’s Fiona Reynolds on the path to net zero, investment in climate solutions and regulation needed to support lowering carbon emissions.

Vice chair and head of transition investing at Brookfield Asset Management, Carney was the former Bank of England governor while Reynolds previously headed up the United Nation’s Principles for Responsible Investment.

Standardised reporting

A growing number of large Australian companies were improving disclosure on environment, social and governance (ESG) risks in response to growing scrutiny from regulators, investors and the community according to a recently-published report by ACSI. “Detailed ESG reporting is high on the agenda of investors,” said Davidson.

One of the impediments for investors is the lack of a standardised framework on reporting on climate and other ESG matters that make it difficult for them to assess the risks across different investments in the portfolio.

The gap is being addressed through the establishment last year of the International Sustainability Standards Board which is tasked with coming up with a comprehensive global baseline of sustainability-related disclosure standards.

“ACSI is strongly supportive of developing true global standards on reporting that you can sit alongside current accounting standards,” said Davidson. “I am confident we will end up with a comprehensive global standard going forward.”

Delegates will also hear from Sue Lloyd, vice chair of the ISSB on a panel discussing the future of sustainability reporting, together with Kristian Fok, chief investment officer of Cbus Super, Vanessa Zimmerman, chief executive officer of Pillar Two, and Emma Herd, partner – climate change and sustainability services at EY.

Also on the agenda are senior executives from some of Australia’s largest companies discussing turning around poor culture and how boards of directors have responded to various challenges as well as the corporate regulator Australian Securities and Investments Commission on the increasing risk of greenwashing.

There will also be a discussion around company engagement with First Nations Peoples, on the back of the destruction of the Juukan Gorge two years ago. “ACSI is working with companies to strengthen engagement with First Nations peoples. This is an evolution of corporate practice as to how to build a genuine relationship,” said Davidson.

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