KEY THEMES FOR 2018: Financing The Transition

One question being faced across the economy, is how will we finance and deploy at scale, the low-carbon technology and solutions needed to drive the transition to a net-zero future? According to Lord Nicholas Stern’s 2016 Global Commission on the Economy & Climate Report, the world will need to spend around USD $90 trillion in new, climate resilient infrastructure to lock in the low-carbon development pathway that is critically needed. The International Energy Agency’s 2017 analysis calculated that in order to meet our 2 degree Paris commitments, we would need to spend on average USD $3.5 trillion a year out to 2050 – and that’s just on the energy sector alone.

So how do we manage this financial transition? How do we unlock the capabilities of our financial institutions and the global investment community, and use public sector finance to leverage private sector funds? These will be some of the key questions we will be examining at the 5th Australasian Emissions Reduction Summit, on the 1st & 2nd of May at the MCG in Melbourne.

Certainly we’ve seen a strong global trend from the global institutional investment community towards fossil fuel divestment, but now there is an emergence of new financial products (such as green bonds and low-carbon development finance), but there is now emerging a push from investor for companies to disclose their climate risk, and the actions they are undertaking to mitigate these risks – this in response to the Financial Stability Board’s Taskforce on Climate-Related Financial Disclosure (TCFD) recommendations.

Here in Australia, the Australian Prudential Regulation Authority (APRA) Executive Board Member Geoff Summerhayes has, in a 2017 landmark speech to the Insurance Council of Australia, warned that climate change is a financial risk, and one that needs to be taken seriously by financial institutions, insurers, banks and super funds. This is a position now supported by organisations including the Investor Group on Climate Change, Australian Banking Association, the Council of Financial Regulators, and indeed earlier this year the Governor of the Reserve Bank of Australia, Dr Philip Lowe described in a speech that the guidance given by the TCFD as “exactly the right direction to be heading”.

Australia is well known for having a responsive, nimble and innovative financial sector, and once that can really help to drive the financial transition – and create the financial products that are needed to scale up and deploy the energy, carbon Farming and industrial technologies needed to drive our national and international low-carbon transition.

The best way to connect with the financiers, and to understand the risks and opportunities in financial markets is to attend the 5th Australasian Emissions Reduction Summit, and connect with national though and industry leaders’ including those from ANZ Bank, Clean Energy Finance Corporation, Commonwealth Bank, Suncorp, Westpac, Cbus Super, Investor Group on Climate Change and Bloomberg New Energy Finance (others to be confirmed).

Places are filling up fast – reserve your spot today!

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