it is a very hard decision for Canberra to cut back on natural resources considering the fact they are very important sources of revenue for the country’s economy. “That’s where in those conversations, institutional investors can also provide a perspective on how they would foresee such a transition to take place,” he added.
Nevertheless, it is highly unlikely that the Pacific nation would be receptive of Robeco’s efforts, as Prime Minister Scott Morrison, who has been concerned over the political sensitivity linked to industries such as coal and gas, has firmly refused to commit to a deadline on achieving carbon neutrality. Given the country’s economic reliance on these natural resources, Canberra is hoping to rely on technology which enables carbon capture and storage in order to meet its obligations under the Paris Accord.
However, as global investors continue to forge ahead in their plans to decarbonise their portfolios by 2050, Australia would find itself in a difficult situation if it does not follow suit. Debt investors across the globe are attempting to balance their client demands for greener portfolios with their fiduciary duty to make money. They continue to assess effects of climate change on the industry in order to determine if and how much economic growth has to be sacrificed for countries to adapt.
Therefore, Australia cannot by any means fail to accelerate its efforts to curb greenhouse gas emissions, or the country may experience a sudden, disruptive changes in the economy. According to Deloitte Access Economics, one-third of Australia’s economy and almost a quarter of the workforce will be exposed to disruption if the country’s key trading partners source cleaner materials elsewhere. Accordingly, Robeco is of the view that Australian institutional investors are in a better position to assist the government in avoiding this predicament, as they are have a “sharper view” of the opportunities that would facilitate a more effective transition, according to van der Werf.
