The long-term risks of climate change are becoming clearer with every ‘unprecedented’ weather event. Bushfires in California, floods in China and Germany, and heatwaves in Canada all point to an increasingly unstable climate.
While many government’s in rich countries have been slow to adapt their policy setting to this emerging crisis, a number of Asian governments have shifted from being laggards to leaders in their approach to climate action.
“There’s been a seismic shift in the climate change policies in the Asia region, in the last 12 or so months.” Says Rebecca Mikula-Wright, incoming CEO of the Investor Group on Climate Change (IGCC). Rebecca is also CEO of the Asian Investor Group (AICC) and she will continue in a dual role.
For private companies and their investors, it’s less about the nature of climate policy, but instead, they just want certainty around what is expected of them so they can confidently plan and make investments.
“It’s happened so rapidly in Asia. And not only in terms of net zero by 2050, but now with 2030 targets and the expectations that we need these near term targets. In Korea last year, for example, they were the first Asian market to announce their own version of a ‘Green New Deal’. But most importantly they then put forward specific policies around that, which led to the set up of private funds based on that Green New Deal. So, in a matter of months, we saw how creating clear targets, along with the supportive enabling policies, creates immediate investment flows to support those policies.” Rebecca says.
The Japanese government discovered that mandatory rules weren’t required, once industry was aligned on what was expected of them.
“In Japan the coordination by key ministries and regulators have created the TCFD Consortium. It was developed through collaboration between the Ministry of Environment, the Ministry of Energy, Trade and Industry, and the Financial Services Authority, to bring the industry together. They said the need to report on climate risk would be voluntary initially, but that was enough, it moved the market. So again, it’s another example of how a collaborative approach, even without mandatory settings, can have a big impact.” Rebecca says.
China is Leapfrogging the Rest with a Net Zero Commitment and an Emissions Trading Scheme
China is Australia’s top trading partner (closely followed by Japan and Korea) and we can’t ignore the follow-on effects that their decarbonisation will have on our exporters.
“China’s announcement to target Net Zero by 2060 was ahead of the US, and it really put a stake in the sand. It said to the world, we want to be seen as a global leader on this. They’re very cognizant of wanting to show that leadership, and that they’re willing to move into that vacuum that was created by the US on climate policy.” Rebecca says.
“But also they’re moving ahead with their emissions trading scheme, which we’ll watch carefully, as well as their environmental reporting standards. They’ve got a lot of work to do, but again they’re catching up very quickly, ‘leapfrogging’ is a term that I often use when it comes to Asia, because when they move, they often leap forward, when they’re ready to make those big moves.”
Rebecca Mikula-Wright will be CEO of both the IGCC and the AIGCC
Rebecca has been the Executive Director of the Asia Investor Group on Climate Change (AIGCC) for almost five years, and she will continue in that role as she takes the helm of the Australian chapter, the IGCC, as well.
They both share similar governance structures, and the IGCC board sees valuable synergies in Rebecca working across both bodies.
“We are fortunate to have someone of Rebecca’s calibre step in and lead the dual organisations during this time of enormous growth. In particular Rebecca will bring to the table valuable insights from rapidly moving Asian economies that make up the bulk of our export markets and in which many Australian and New Zealand investors are increasingly active in.” Says IGCC Chair, Stephen Dunne.
IGCC members represent $2 trillion in funds under management in Australia and New Zealand and $20 trillion around the world.
The organisation acts as a conduit between investors and policy makers, to drive collaboration, and action on climate change. While the drive to garner more net zero commitments will remain as a key priority, there’s other campaigns in the works.
“A key focus is the Climate League 2030 initiative, it’s for investors to say, Okay, what’s our role in reducing emissions in the economy in this critical decade? And so we’ve developed that initiative so that investors can consign on and say, ‘this is what we are doing, and this is how we are contributing to the emissions reductions in this country.’
On the whole, Net Zero is still a very active piece of work, and I feel like it’s just getting started. We’ve had a lot of leaders, doing quite a lot of work in Australia for quite a long time. But now the task is to really bring the whole industry along. I think we’ve reached a tipping point of awareness for investors, and now we need to drive implementation forward at an accelerated pace.” Rebecca says.