2025 RIAAs Demand for Climate Solutions: Steadfast Owner Commitment Remains Unwavering
In a significant shift towards sustainable investing, Australian asset owners are prioritising climate solutions investments, particularly in private markets, as part of their long-term strategies. This evolution, influenced by recent regulatory developments and evolving investor expectations, was the focus of discussions at the 2025 RIAA annual conference in Sydney.
One of the key highlights of the conference was the keynote address delivered by Vicki Doyle, CEO of REST, one of Australia's largest superannuation funds with a member base of over 2 million, notably young Australians.
The new climate-related financial disclosure mandates, introduced from January 2025, require Group 1 entities - asset owners with over $5 billion in assets under management - to provide greater transparency on climate risks, opportunities, and strategies within their investment portfolios. Smaller entities will follow suit from 2026 and 20227.
This legislation, aimed at providing greater transparency, is pushing asset owners to incorporate climate considerations actively into their governance and reporting frameworks. The inclusion of private family investment companies of significant size also signals a shift where private market investments are not exempt from climate scrutiny and are expected to align with net-zero and sustainability goals.
Leading Australian asset owners are recognising the importance of an integrated approach to climate change and biodiversity protection. This approach is crucial for mitigating long-term financial risks and capturing sustainable growth opportunities. At events like COP31, Australian investors and organisations have emphasised the need for policy certainty, clear disclosure frameworks, and investment incentives to mobilise capital towards climate and nature-positive outcomes.
Institutional investors are actively investing in climate technology venture funds, signalling growing confidence and commitment to private market climate solutions. These investments not only support innovative climate solutions but also align with long-term decarbonisation pathways and portfolio resilience strategies.
The Australian Securities and Investments Commission (ASIC) has been tasked with implementing climate reforms such as the 'generational shift' in mandatory climate disclosures. ASIC commissioner Kate O'Rourke stated that the regulator will be pragmatic and proportionate in its approach.
The success of Australia's reporting regime depends on its alignment with global reporting standards. Carmen Leung, senior manager at FTSE Russell, compared climate solutions to tech investments from a decade ago, emphasising their potential for long-term growth.
However, concerns have been raised about the lack of reporting requirements for investment banks and insurers. Australian Ethical will be making a submission to the ASSB on June 2, calling for the inclusion of these sectors in reporting requirements. Alison George, chief impact and ethics officer at Australian Ethical, warned of a greenwashing loophole in the new reporting standards and called on the ASSB to advocate for stricter standards.
The 2025 RIAA annual conference in Sydney had more asset owners in attendance than at any time in RIAA's 25-year history, reflecting a growing interest in responsible investment. Investor excitement over climate solutions opportunities was palpable, with private markets featuring prominently in conversations.
Prime Minister Anthony Albanese's second term has raised high expectations from investors regarding climate policy certainty. Damian Graham, CIO of Aware Super, expressed concern that uncertain policies make it difficult to allocate capital, emphasising the need for clear, long-term strategies.
Overall, Australian asset owners are embedding climate solutions deeply into their long-term strategies by adhering to new climate-related disclosure mandates, investing in private market climate innovations, and adopting an integrated nature-and-climate approach. This evolving stance reflects a recognition that climate change poses both material risks and opportunities that must be managed proactively to safeguard and enhance investment returns over decades.
- Given the new climate-related financial disclosure mandates, asset owners like Vicki Doyle, CEO of REST, are now required to provide greater transparency on climate risks, opportunities, and strategies within their investment portfolios, as part of their long-term strategies, as these requirements take effect from January 2025.
- Institutional investors in Australia, such as those in attendance at the 2025 RIAA annual conference, are increasingly investing in climate technology venture funds as a sign of their growing confidence and commitment to private market climate solutions, which not only support innovative climate solutions but also align with long-term decarbonisation pathways and portfolio resilience strategies.
