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New era for Australia’s finance sector announced

Future of finance

New era for Australia’s finance sector announced

Future of finance

An unprecedented collaboration of heads of major banks, insurance and superannuation organisations will join forces to create a roadmap to guide corporate Australia and the economy through a critical decade and address issues including climate change.

The Australian Sustainable Finance Initiative has been announced this week to help shape a stronger economy that prioritises human wellbeing, social equity and environmental protection, while underpinning financial system stability.

This move is a significant nod to the investment philosophy held by Seer Asset Management, which aims to generate capital growth over the medium to longer term and is a multi-thematic fund focused on sustainable investing.

Modelled on international best practice already seen in groups including the European Union’s High-Level Expert Group on Sustainable Finance and the UK’s Green Finance Taskforce, the Australian sustainable Finance Initiative will be guided by a Steering Committee charged with developing a set of recommendations to enable the finance sector to contribute more systematically to the transition to a more resilient and sustainable economy.

The leaders and senior executives of Australia’s major banks, superannuation funds, insurance companies, financial sector peak bodies and academia will come together to set out a roadmap for realigning the finance sector to support greater social, environmental and economic outcomes for the country. Representatives from Westpac, Commonwealth Bank, NAB, IAG and CBUS have been named as part of the collaboration.

An Australian Sustainable Finance Roadmap will be delivered by the Steering Committee in 2020 with recommendations that will assist the financial services sector to:

  • Mobilise capital to deliver on national and global sustainable development and climate goals.
  • Enhance the sustainability, resilience and stability of the financial system by embedding sustainability, climate and human rights considerations into financial markets and products.
  • Ensure better informed financial decision-making by enhancing disclosures and transparency on environmental, social and governance risks and opportunities, and
  • Deliver a financial system that meets community expectations around sustainability.

IAG group executive Jacki Johnson has been announced co-chair of the initiative.

Johnson says: “The roadmap we create will include pathways, policy signals and frameworks that will better enable the financial services sector to contribute to delivering on international commitments, such as the Paris Agreement on Climate Change and the US Sustainable Development Goals, while underpinning economic stability and prosperity for Australia.”

Issues such as climate change and human rights have become material to business and the financial services community. In fact, climate change was recently described by the Deputy Governor of the Reserve Bank of Australia as a ‘systematic risk’ to the stability of the Australian economy.

Johnson says: “As we approach 2020, we’re rapidly entering a critical decade for managing climate change and other risks.

“Australia has made a number of commitments to international targets. Achieving these goals extends beyond social or environmental objectives – it’s an economic and financial necessity. Our economy simply cannot prosper in an environment of ever-increasing severe weather events and the subsequent broader impacts these will have.”

Delivering these goals requires not just government policy, but business and finance leaders, she says. “Achieving these goals presents a sizeable economic and social opportunity.”

Seer invests in a diverse portfolio of global companies providing solutions to these challenges via six sustainable investment themes – rise of the individual, healthcare, agriculture, food and water, energy, globalisation and disruptive technologies. The portfolio is actively managed and stock selection is based on deep research integrating financial factors with environmental, social and governance factors.

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