RIAA 2025: asset owner demand for climate solutions remains steadfast
Investor confidence is backed by attractive opportunities, a focus on risk management and member expectations
“Regardless of the short term craziness”, said REST chief executive Vicki Doyle, “you do have to maintain a long term view”. Doyle, who heads one of Australia’s largest superannuation funds, was delivering a keynote address at the 2025 Responsible Investment Association of Australasia (RIAA) annual conference in Sydney.
The event had more asset owners in attendance than at any time in RIAA’s 25-year history. They were joined by asset managers, index providers, regulators, academics and advisers.
All of whom had a timely opportunity at the heels of the Australian election, to reflect on where things stand and where they are headed.
Climate solutions
Capital allocation – past, present and future were high on the agenda in Sydney. Despite geopolitical headwinds, investor excitement over climate solutions opportunities was palpable.
“Ten years ago would you have ignored tech?”, asked Carmen Leung, senior manager, sustainable product, APAC at FTSE Russell. Leung’s point was one investors in the room echoed – climate solutions was an opportunity too lucrative to sideline.
Although public market allocators had their share of attention, private markets featured prominently in conversations on and off-stage.
“We can have more control over outcomes”, said Damian Graham, chief investment officer at Aware Super – as he explained why private market allocations are on the rise.
Marianne Harper Gow, senior ESG analyst at asset manager Baillie Gifford offered another view. “Investment in private market is critical to kickstarting breakthrough tech”, she affirmed. The private market investment universe, participants noted, is rapidly expanding - to include scalable climate technologies climbing up the financing ladder.
Lucrative opportunities aside, asset owner interest in responsible investment has a lot to do with member demands. REST has a member base of over 2 million, notably young, Australians. One in five Australians under the age of 30 are REST members. They will inherit the future consequences of its current investments.
“Our members have made it clear that they expect this”, affirmed Doyle.
Additionally, asset owners represent a powerful demand signal for climate solutions allocations – a signal that attendees were convinced political noise would find challenging to subdue.
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“We are seeing asset owner being clearer about their demand signals”, said UN PRI chief executive David Atkin in a fiery presentation met with a zealous reception. Despite gusty geopolitical headwinds from Washington, Atkin was confident asset owners are staying the course.
“Things are tough, the clock is ticking but time hasn’t run out yet”, he added.
Albanese 2.0
Given its timing, it was inevitable that RIAA 2025 was an opportunity for investors to communicate expectations from Prime Minister Anthony Albanese’s second term.
Expectations regarding climate policy certainty were high. Particularly since news that the government had approved the North West Shelf gas processing plant – one of Australia’s largest gas projects – for operations beyond 2030 came in halfway through the two-day event.
“When policies are uncertain, it is even harder to allocate capital”, warned Aware Super CIO Damian Graham.
Investors have high hopes from climate reforms such as the ‘generational shift’ in mandatory climate disclosures. The task of implementation now rests with the Australian Securities and Investments Commission (ASIC).
“ASIC will be pragmatic and proportionate”, said ASIC commissioner Kate O’Rourke in her address to attendees in which she outlined the regulator’s priorities.
Loopholes
The success of Australia’s reporting regime depends to a large degree on its alignment with global reporting standards.
Australian Ethical chief impact and ethics officer Alison George warned of a greenwashing loophole in the new reporting standards. She called on the ASSB – the Australian equivalent of the ISSB – to step in.
“The ASSB must advocate for reporting standards that reveal the extent of risks arising from scope 3 emissions in its submission to the International Sustainability Standards Board (ISSB) or risk Australia’s transition efforts falling short”, she said.
George also pointed out that reporting requirements should not exclude investment banks and insurers. “Leaving investment banks and insurers out of these reporting requirements will not only muddy Australia’s transition but present significant, undisclosed long-term risk to these major Australian companies and leave investors guessing on their viable future growth”, she added.
Australian Ethical will be making a submission to the ASSB on June 2nd , calling on the local standard setting body to fix the loophole.
With a guest list titled towards asset owners and an agenda set against the backdrop of political change both local and global - RIAA 2025 was a gathering inclined to send a message. And send it did. A message that attendees returning to their desks will now steward: the answer to short-term political noise, is long-term asset owner vision.
Albanese's victory strengthens Australia's climate policy outlook
