A new report has revealed a significant disconnect between the climate commitments of major Australian companies and their actual investment strategies, raising serious concerns about the country’s ability to meet its net-zero targets.
The analysis, conducted by climate advisory firm Pollination in partnership with the Investor Group on Climate Change (IGCC), assessed the capital expenditure patterns of 12 of Australia’s largest carbon-emitting companies across sectors including mining, energy, aviation, and retail. Despite public pledges to reduce emissions, the report found that most companies have failed to align their investment decisions with their stated climate goals.
According to the findings, only one company showed strong alignment with more than half of the key benchmarks for climate-aligned investment. Just three demonstrated a clear shift away from funding fossil fuel-related operations. The majority, however, continued to invest in carbon-intensive activities, despite corporate pledges to transition to low-carbon operations.
Pollination managing director Zoe Whitton said the findings point to a “material gap” between what companies are saying and where they are putting their money. She warned that while many companies disclose general climate-related figures, they often fail to provide detailed, project-specific data that would allow investors and the public to verify alignment with emissions targets.
The report, titled Financing Australia’s Corporate Climate Transition, proposes a new framework to help evaluate whether corporate capital allocation supports a credible climate transition. It outlines eight benchmarks based on principles such as transparency, accountability, and measurable progress toward net-zero goals.
The findings come at a critical time as the federal government prepares to announce Australia’s 2035 emissions reduction targets by September. Experts and investors argue that clear and enforceable climate policies are urgently needed to guide private sector investment toward sustainable practices.
Richard Proudlove, director at IGCC, which represents institutional investors managing a combined US$35 trillion in assets, said the lack of credible capital alignment undermines both investor confidence and national climate ambitions. He emphasized that voluntary corporate pledges without transparent follow-through risk stalling the country’s transition to a low-carbon economy.
Analysts say that without stronger government regulation, clearer policy signals, and standardized climate reporting, the gap between climate promises and financial reality is likely to persist. As the deadline for the government’s 2035 roadmap approaches, pressure is mounting on both policymakers and corporate Australia to match ambition with action.
