Green finance to fund our cities

26 Sep 2018

In line with the 2015 Paris Agreements, Australia has embarked on a trajectory to reduce its greenhouse gas emissions by 28 per cent by 2030.

It’s an ambitious target given that traditional high-carbon infrastructure investments remain dominant in Australia, with road, rail and ports being built to facilitate fossil fuel industries.

Despite this, a recent report released by the Climate Bonds Initiative ranks Australia as “an example of world’s best practice” when it comes to developing a green bonds market for infrastructure and development.

In our cities, the number of Green Star rated buildings is growing, as is 6 Star Green Star certifications demonstrating global leadership in sustainability.

The CBI report, Green Infrastructure Investment Opportunities Australia & New Zealand, explores around 400 green infrastructure projects  in Australia and New Zealand, to help meet the growing demand for green and ESG based investment opportunities – including green bonds - as well as to support the two countries’ transition to a low-carbon economy.

From heatwaves to tropical storms, our cities will need to adapt to extreme weather events spurred on by climate change.

Resilience has become a mainstream consideration for how we build our cities for future Australians to live, work and play in.

It’s up to industry and government to collaborate on finding solutions to smart cities – and green financing could be one of them.

With an increasing urgency to respond to the challenges of climate change, governments, the financial sector, superannuation funds and industry all need to increase their emphasis on policies and provision of low-carbon, sustainable and resilient green infrastructure. The transition from polluting brown infrastructure to cleaner and greener assets needs to gain momentum with widespread support.

The report uses the Climate Bonds Taxonomy to identify eligible green projects under four sectors:

  • Low carbon transport – mostly projects valued above AUD100m (Australia) and NZD100m (New Zealand)
  • Renewable energy - only renewable energy generation facilities above 50MW
  • Sustainable water management – mostly projects valued above AUD50m (Australia) and NZD50m (New Zealand)
  • Low-carbon buildings - Green Star certified projects - mostly 6-star rated projects

The report has been prepared to help meet the growing demand for ‘green’ and ESG investment opportunities – including green bonds - as well as to support both Australia and New Zealand’s respective transitions to a low-carbon economy.

It aims to identify green investment projects with investment potential and explore how investors can gain exposure to these using innovative green finance instruments.

To learn more about the 400+ green investment opportunities currently in Australia and New Zealand  read the full report.