Environment Minister Sussan Ley has revealed Australia will be joining the international Coalition for Climate Resilient Investment (CCRI), with a further commitment to refreshing the National Climate Resilience and Adaptation Strategy later in the year.
The CCRI, which was partly conceptualised by the UK, is finance sector-led, with 75 institutional investors, banks, insurers, rating agencies and governments representing more than US$10 trillion in assets aiming to address the challenges of climate change.
The group has aimed to develop frameworks to price physical climate risks into investment decisions, with the ultimate goal of channelling private capital towards building more climate-resilient economies.
The Investor Group on Climate (IGCC), which represents local institutional investors, welcomed the government’s move. The group is also a supporting institution of the CCRI and a member of the initiative’s asset design and structuring working group.
IGCC chief executive Emma Herd commented Australia still remains deeply unprepared for the physical risks from climate change.
“Federal and state governments currently spend on average $2.75 billion a year on direct recovery from disasters, but only $100 million building resilience against such events,” Ms Herd said.
“The total economic cost of natural disasters is expected to rise to almost $40 billion by mid-century, even without consideration of the effects of climate change.”
But private capital will be essential for building the necessary infrastructure and climate resilience.
“The need for cross-sector and public and private collaboration will be particularly acute as governments will be more fiscally challenged after deploying immediate economic relief in the wake of the COVID-19 pandemic,” Ms Herd added.
“With the return of the US to the Paris Agreement under President Biden and the UK-hosted COP26 climate change talks in November, global action on climate change mitigation and adaption is set to explode in 2021.”
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