CPD, in partnership with Climateworks Centre, Pollination, ACTU, and AI Group, hosted the second roundtable for the 2035 Climate Initiative series on Tuesday 4 April. The focus of the roundtable was on how financial systems and capital markets will change over the next fifteen years, raising the large amounts of sustainable finance needed to pursue rapid decarbonisation of the economy. In directing the discussion we asked:
- What will financial systems and capital markets look like in 2035?
- What changes need to occur now to get us there?
The roundtable was attended by over 40 participants, including state and federal government officials, representatives from regulators and investors, and leaders representing businesses and workers in the real economy. A lively discussion ensued as we heard about visions for 2035, what investors can do now to align asset portfolios with a clean economy, and the potential for the superannuation industry to support decarbonisation efforts in Australia, among other topics.
The responsibility for ensuring that climate change is properly accounted for by financial systems and capital markets is one shared by both the private and public sectors. At the roundtable, we repeatedly heard about the need for going hard and early.
Some of the actions discussed to enable private and public sectors to work together to achieve this included building systematic risk awareness and management capability both in climate change and more broadly, as well as building systems that enable financial investment decisions to take in a broader set of inputs.
There was agreement among participants that a focus on greater collaboration across the financial system, and an increase in active management expertise when it comes to dealing with climate change risks and opportunities would assist in moving the needle significantly.
From the side of the public sector, there was discussion about the value of cohesive (and ideally bipartisan-supported) policy frameworks that unlock private funding for climate solutions. This can include policies to reduce skill bottlenecks, map out sectoral pathways, solve supply chain issues, and lessen planning restrictions as well as those that provide large-scale public funding for incentives and projects to kickstart nascent markets.
Another common theme was the value in developing an industrial policy framework that enables Australia to capitalise on its competitive advantages in a decarbonised world.
As only the second meeting in what will be a multi-year collaboration between CPD, Climateworks Centre, Pollination, ACTU and AI Group in hosting these roundtables, we look forward to seeing it continue to grow and we commend the work being done by participants to facilitate a swift, orderly and just energy transition.
About the 2035 Climate Initiative
The 2035 Climate Initiative is an evolution of the Climate and Recovery Initiative (2020-2022).
We look beyond the horizon of the current decade, and identify the best ideas and opportunities for aligning Australia’s long-term economic future with climate and transition priorities. Our stakeholder roundtable series brings together trusted leaders, experts and advisers from business, regulation, policy and the community to consider the challenges and opportunities ahead.