Pradeep Philip

The Australian government will soon decide on its 2035 emissions reduction target, with insiders reporting it will settle somewhere between a 65% and 75% reduction on 2005 levels.

New scenario analysis from Deloitte Access Economics, prepared for Future Group, shows how a weaker 65% target compared to a stronger 75% target would impact the economy.

75% is the economic opportunity we can’t afford to miss:

• A higher interim target and associated policy action could bring forward $20 billion of investment each year in the decade to 2035.
• 75% by 2035 offers Australia one of the single biggest boosts to future business investment.
• The 75% target brings forward investment in Australia’s transition, supporting an additional 45,000 jobs per year on average between 2025 and 2035 above the 65% by 2035 scenario.
• The higher climate target increases export opportunities to the tune of $190 billion for Australia.

Deloitte Access Economics Lead Partner Pradeep Philip says: “Compared to 65%, a 75% target means more jobs, more exports, and a stronger economy. Time and time again, our economic scenario modelling has concluded that strong targets, which can attract business investment, are good for the economy.

“Australia adopting a 75% by 2035 target offers greater economic opportunity and a lower cost to transition on the path to net zero by 2050.

“Achieving a 75% target can bring forward significant investment across the economy, unlocking a $227 billion economic opportunity, in today’s dollars, and 45,000 more jobs per year over the next 10 years compared to a 65% target.”

“This modelling shows that achieving a 75% target sets Australia up for a least cost transition to net zero – growing new industries, supporting jobs and transitioning our economic base onto new growth paths.”

Future Group backs 75%

Superannuation provider Future Group – the parent company of Future Super, Verve Super, GuildSuper, Child Care Super and smartMonday – is backing a 2035 emissions reduction target of at least 75%.

Over 350 businesses have joined Future Group’s campaign including Fortescue, Atlassian, Canva, Unilever, Volvo Group Australia, Culture Amp, Bank Australia, Intrepid Travel and Ben & Jerry’s.

These companies have signed the Business for 75 open letter^[1] calling for the government to commit to at least a 75% target.

Future Group Chief Executive Simon Sheikh says: “We’ve joined with businesses from across Australia including Fortescue, Atlassian, IKEA, Canva, Unilever, Volvo Group and more than 400 others to urge the Australian government to back a credible 75% emissions reduction target as economic modelling shows this will support business investment, innovation and growth.

“Australia is in a race to secure the global capital required to establish new green industries. Modelling completed by Deloitte Access Economics shows that a target of 75% can unlock more than $370 billion in additional economic growth for our country over the next 10 years. This is the equivalent of more than $10,000 per person.

“As the world decarbonises, Australia holds a winning hand: we have abundant land, affordable renewable energy, critical minerals, and a skilled workforce. With these strengths, we can build a future powered by clean energy, advanced manufacturing, and secure, well-paid jobs in our regions. But ambition must come first.

“While some in parliament are trying to slow things down with climate denial, global partners are looking at Australia to see if we’re serious about emissions reductions. A strong 2035 target will send a clear signal to investors, and global markets, that Australia is open for business.”

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Notes:
[1] Business for 75 open letter

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The screening out of fossil fuel companies aligns with insights from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC), which demonstrates the diminishing viability of fossil fuels and the growing economic risks associated with these assets as governments and corporations around the world progress towards their net zero commitments.

With Responsible Investment Association of Australasia (RIAA)’s latest findings that 88% of consumers expect their superannuation to be managed responsibly and ethically, this move also meets member expectations.

Sharon Davis, Executive Director of Investments at Future Group, said: “Superannuation is a long-term investment, and we have a responsibility to safeguard our members from the asset risks associated with fossil fuel companies and other harmful industries. The decision is a proactive step to ensure sustainable growth and financial security for our smartMonday and Guild Super members. It’s also part of a wider program of reinvestment in climate solutions and positive impact investments across all our superannuation funds that we have recently acquired.”

Through close collaboration with Future Group, Scientific Beta has helped develop an investment strategy designed to enhance long term performance while aligning with Future Group’s sustainability objectives.  Equity Trustees is the Responsible Entity of the new international equities investment.  State Street Global Advisors acts as the implementation manager for the investment.

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Simon Sheikh

Sustainable superannuation company Future Group has launched a first-of-its-kind tool, RealZero Check, a free and open source, science-based tool designed to help investors and financial institutions set credible net zero targets and measure their decarbonisation progress.

Developed in partnership with the University of Technology Sydney’s Institute for Sustainable Futures, RealZero Check uses the One Earth Climate Model to evaluate a portfolio’s emissions against global carbon budgets, showing the decarbonisation pace needed to align with the Paris Agreement’s 1.5 degree target.

Despite widespread commitments to net zero by 2050, it’s challenging to gauge whether these pledges represent real, near-term progress needed to avert catastrophic climate impacts.

RealZero Check applies the carbon budgets necessary to limit warming to 1.5 degrees on a sector-by-sector basis so investors can see how their investments stack up against those carbon budgets, and where change might be necessary to really make progress towards net zero.

“RealZero Check is about real, measurable progress toward genuine emissions reduction, setting a new global standard for responsible investing and climate accountability,” said Simon Sheikh, Future Group CEO.

“With 79%* of Australians desiring climate-aligned net zero commitments from their financial providers, RealZero Check will help the financial services sector develop meaningful, authentic, science-backed net zero strategies.

“Furthermore, it will empower investors to make informed investment choices by breaking down portfolio emissions in a way they can easily compare their impact against scientifically backed benchmarks.

“It is not about ticking boxes or relying on carbon offsets. We believe this is a world-first, especially in that we are making this tool free and open source – anyone can use it. This aligns with Future Group’s commitment to supporting impactful climate action in the finance industry.

“We believe capital is the key to achieving net zero targets. We don’t have the time to wait until 2050, there is only a small window of opportunity to create real change. RealZero Check will help get the industry on track.”

The tool’s development complies with directives and crackdowns on greenwashing from regulatory bodies, including the Australian Securities and Investments Commission, which advocate for transparency in sustainability claims. It also serves as a valuable tool for both investors and regulators to combat misleading net zero claims.

Jeremy Cooper, Future Group’s Carbon Advisory Board External Chair, says that RealZero Check provides a much-needed resource for investors to validate their net zero commitments against climate science, aligning their financial decisions with a sustainable future.

“Unlike traditional models, RealZero Check focuses on genuine emissions reduction, helping investors avoid over-reliance on offsets and meet real climate goals.

“By offering this tool for free, Future Group is not only advocating for but actively supporting a climate-responsible investment landscape,” Mr Cooper said.

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*According to Responsible Investment Association of Australasia research.

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