Written by:
Future Group
30 April 2025
As political opponents have been scrambling to clarify their election manifestos, they’ll likely be keeping to hand a copy of the Grattan Institute’s Orange Book 2025: Policy priorities for the federal government. Released in March, the agenda-setting think tank report identifies which policy areas merit focus and suggests some solutions.
But it misses a trick.
The Orange Book 2025 report outlines 9 policy areas that the next government can focus on to address Australia’s top 5 most important challenges. One of these five policy priorities should be cutting emissions and pursuing net zero goals, the report concluded.
Australia’s trajectory is currently falling short of its 2030 climate goals, but with urgent investment, it’s not impossible to meet them. There’s considerable ground to make up though, and unlocking renewables capacity is key.
Investment in infrastructure is urgently needed to support the energy transition at a time of rising demand, because the existing grid is struggling with renewables’ rapid expansion. But the Integrated System Plan (ISP), designed to attract renewables investment, isn’t functioning as well as it should. This creates investor uncertainty.
So how do we get there? We have a vision that the Orange Book missed.
The Orange Book warns against putting excessive subsidies behind this and recommends private sector co-investment, backed by clear, long-term policies.
What the report doesn’t mention is specifically tapping into the superannuation & financial services sector to support the energy transition. Investment has a crucial role to play in supporting the next government achieve these policies.
Super funds invest over a very long time horizon, so investors need the ISP to include more projects that are big and stable enough to be attractive long-term investments before they deploy large amounts of capital.
Australia’s $4.2tn super sector offers a pool of capital that could play a huge role. Investing just 7.2% of super could transition Australia’s power sector to 100% renewable energy.
Climate-aligned finance is essential to meet our net zero commitments. So where is the regulation of the financial sector to bring it into line with the government’s own net zero plans?
As a highly regulated sector, shouldn’t super be incentivised to invest in alignment with net zero, and discouraged from investing in industries that make climate change worse?
Imagine what investing Australia’s superannuation to drive positive impact could achieve. This is what Future Group wants to see.
To make it easier for investors to check the climate impact of their portfolios, we developed RealZero Check, a science-aligned tool for investors to measure their portfolio’s alignment to the Paris Agreement pathways to net zero.
Developed in partnership with climate researchers at UTS (University of Technology Sydney), RealZero Check is a free, open-source downloadable tool that measures investments’ emissions to help focus portfolios towards the trajectory needed to meet the Paris Agreement.
The Orange Book report has missed the opportunity to encourage the government to lean on the super sector more for climate-aligned investing.
If the government is serious about bringing the financial sector on the journey through the energy transition it needs to see the pool of retirement savings in the super sector protected from the risks associated with a decarbonising economy and making progress towards net zero.
This is Future Group’s vision: to see Australia's retirement savings invested to drive positive social and environmental impacts.
The flow of capital is what helps shape the future. Policy input from the government to support responsible investment can be a major stride along the pathway to a future free from climate change.
