Australia and New Zealand demonstrate leadership by investing in resilience through adaptation. The Investor Group on Climate Change (IGCC) is a collaboration of Australian and New Zealand institutional investors focused on the impact of climate change on investments. IGCC represents investors with total funds under management of more than $3 trillion in Australia and New Zealand and $30 trillion worldwide. IGCC members’ beneficiaries include more than 7.5 million people in Australia and Aotearoa, New Zealand.
The IGCC has launched a new strategy to stimulate investment in climate resilience and protect against the physical risks of climate change. The latest research indicates that Australia and New Zealand will face hundreds of billions of dollars in economic losses due to extreme weather events and altered climate conditions. Institutional investors are exposed to physical risks directly and indirectly, such as damage to assets, supply chain disruptions, insurance unavailability, and worse economic conditions. Australia and New Zealand have the potential to provide international leadership and innovation in building resilience with sophisticated workforces and unique exposure to physical risks. The strategy set out four key objectives:
- to integrate physical risk and resilience into existing climate-related activities,
- to develop a shared understanding of physical risks among stakeholders,
- to advocate for investable policy that proactively addresses physical risks, and
- to mobilise private capital into resilience and adaptation measures.
This two-year plan, 2023-2025, is intended to drive urgent economy-wide adaptation and resilience to climate change’s physical damages and disruption. Ultimately enabling investors to protect their beneficiaries from physical climate risk and take advantage of opportunities to build resilience and adapt.
The strategy sets out a pathway for collaboration on how the private sector can proactively invest in adaptation and resilience, setting out a clear business case for why physical climate risks are financial risks. The strategy is actively written in support of a whole-of-society approach, based on the understanding that all stakeholders have a role to play to ensure the costs of climate change do not fall on those most vulnerable and that governments cannot bear the cost alone.
The key message is that urgent collaborative action will prepare stakeholders, society, and communities for future risk, enabling better financial protection and safeguarding.
Click here to read Road to Resilience.