companies and mortgage lenders in the Pacific nation could face major challenges in accessing global financial markets, as some of the most developed economies move to achieve net zero carbon emissions by mid-century.
“We are very aware of the risks that are set out in the IPCC (the United Nations’ Intergovernmental Panel on Climate Change) report,” the Prime Minister said on Tuesday (10 August). “But I’m also very aware of the significant changes that are happening in the global economy. I mean, financiers are already making decisions regardless of governments about this.”
This was the first time the Australian leader admitted that there a growing wave of pressure from foreign jurisdictions, regulators, as well as global investors against countries who are perceived to making insufficient efforts in decarbonising the world economy. This includes the increasing pressure from central bank reserve managers and sovereign wealth funds to divest their portfolios of fossil fuel assets. Accordingly, the Prime Minister expressed his concerns on the effects this would have on Australia’s financial industry, including the mortgage sector, of which one-third of funding is sourced offshore.
“I want to make sure that Australian companies can get loans. I want to make sure that Australians can access finance,” he said. “I want to make sure our banks are well financed into the future so they can provide the incredible support they provide to Australians buying homes and all of these things.”
Nevertheless, he pointed out that as the global economy continues to change, Australia should adapt accordingly, in order to remain competitive. “The world economy is changing. That’s just a fact. We need to continue to change with it to remain competitive, and this issue is clearly directing a lot of that change,” PM Morrison noted.
