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Nei ra ka mihi ki a koutou ko Ngāti Whātua Ōrākei, te mana whenua o tēnei rohe, e mihi ana.

Ki a koutou, ngā manuwhiri, tēnei te mihi.

Tēnā koutou, tēnā koutou, huri noa ki te whare, tēnā tātou katoa.

Thank you for the opportunity to be part of this year’s conference.

One of the real strengths of gatherings like this is the chance to connect with people who share a common purpose – to exchange lessons, challenge each other, and explore how we can all lead in driving more sustainable outcomes through our investment activities.

RIAA has always been more than just a network – over the past 25 years it’s become an institution that drives meaningful change across New Zealand and Australia. The conversations and collaboration it provides are especially vital if we’re to meet the scale of the challenge presented by climate change.

Today, as we talk about Investing in New Zealand’s Climate Transition, I want to share not only what this means for our market here in New Zealand, but how it also looks through the eyes of a global investor.

For example, we’re seeing that despite the noise of shifting politics, the global tide is still moving in one direction. Long-term asset owners, global regulators, and markets recognise that climate change is a material risk. Investors don’t mistake surface changes for the deeper currents – the direction of travel is clear, and it isn’t reversing.

After all – climate change is already here. It touches every asset class, every economy, every community. Failing to account for it introduces undue risk into a portfolio. 

Climate action is often seen as a defensive measure – focused on managing risk, rather than as a forward-looking investment. But the reality is different – while the risks are growing, so are the opportunities – for example, the growth in renewable energy and other climate solutions

The question is how we position our portfolios – and our economy – to take advantage of these opportunities.

Take offshore wind. With the right policy support and scale, it could deliver long-term returns as well as new industry, new jobs, new skills and increased productivity for New Zealand.

We need to be blunt: capital is mobile. It moves quickly, across borders and markets, chasing scale, clarity, and certainty. If other countries create conditions that are more attractive to investors, that’s where the capital will go.

Look at the UK. They have a 30-year energy strategy. Investors know what energy mix the country wants in 2050, and how it plans to get there. That certainty allows capital to flow with confidence.

It’s worth acknowledging we have no real natural competitive advantages here – in fact, given our isolated geographical location, we are at a disadvantage unless we actively create one.

However, we do still have important things going for us that we can and should leverage: a stable political landscape, strong institutions, trusted regulation, and a global reputation for quality, integrity and ingenuity.

But to turn those strengths into real outcomes will require bravery. Global investors are already mobilising trillions of dollars into the transition, and New Zealand has to secure our share.

We can’t expect a single sustainable investment strategy to be a silver bullet. What’s needed is a multi-faceted, diversified approach.

Ultimately, New Zealand needs to be creating investible opportunities at sufficient scale, and making it all simple and easy – which includes making it straightforward for capital to come in – and to exit.

At the New Zealand Super Fund, we’ve seen first-hand what works when scale, clarity and policy enablement give investors the confidence to commit.

A good example is our investment – alongside Infratil – in Longroad Energy – a renewable energy developer in the United States. Longroad has developed and acquired 6GW of wind, solar and battery projects – this is over half of New Zealand’s total installed generation capacity. It’s been a highly successful investment, showing how attractive policy settings and market scale can attract capital and deliver real outcomes.

Here in New Zealand, our partnership with Copenhagen Infrastructure Partners to explore offshore wind shows what’s possible when government and investors engage early.

And through our investment in Galileo, a European green energy firm, we’ve seen the benefits of partnerships that accelerate pipelines and spread expertise across geographies.

Of course, energy isn’t the only area with huge potential. Farming is one of New Zealand’s biggest transition opportunities. Agriculture is central to our economy and our identity – if we can decarbonise it and develop new models for land use, the upside is enormous.

At the Fund we’re already backing this kind of innovation – for example, we’re converting a dairy farm in Canterbury into an apple orchard through our manager FarmRight – the resulting conversions deliver 40% less water usage, 80% less applied nitrogen and 90% lower CO2 equivalent emissions. It’s a good example of how we can adapt and diversify land use in ways that deliver strong, long-term returns while supporting the transition.

Importantly, we’re seeing that our approach is very much in step with our global peers. Large asset owners around the world are making sustainable investment a core part of how they manage risk and deliver returns. We saw this reflected in a recent Willis Towers Watson report we commissioned to review he Guardians against other peer funds.

The review showed that we are aligned with other leading investors on the big systemic risks – including climate change – and on the significance of these risks for resilience and long-term returns. Our global peers also see Net Zero as one of the most significant opportunities for real-world impact, and our allocations to climate and sustainability solutions are very much in line with global peers as well.

Notably, the review reinforced that one of the areas large investors can have the greatest influence is through systemic stewardship – using our collective voice with policymakers, listed companies and industry bodies, as well as through direct investments in unlisted capital.

This matters for New Zealand because the global regulatory environment is shifting rapidly. Climate disclosures, net-zero targets, and increasing regulatory requirements are becoming standard in many major economies.  

The introduction of mandatory Climate-Related Disclosures here was an important step – providing transparency and informing investors. But for global investors, disclosure is no longer a differentiator – it’s a baseline.

What matters is how companies use this: not as a compliance exercise, but as the platform for credible transition plans. Those who lean in to this will attract capital. Those who lag risk being left behind as global regulation – from the EU and beyond – becomes the new norm.

We’re already seeing this play out in our own approach. Since launching our Climate Change Investment Strategy in 2016, we’ve been reducing the Fund’s exposure to assets most at risk in a low-carbon world, while increasing exposure to those driving the transition.

The strategy has been in place for several years. Compared to the market average, the Fund is lower carbon and continues to deliver strong financial performance.

Of course markets can’t deliver the transition alone. Government policy and incentives are critical scaffolding that determine whether investment flows – or stalls.

We can think of it as a framework where risk and reward are shared – where government sets the conditions, and private capital brings the scale and solutions.

This is where things like taxonomies become really valuable. Our Sustainable Investment Team at the Fund has been involved in the development of a proposed Sustainable Finance Taxonomy for New Zealand, led by the Centre for Sustainable Finance (Toitū Tahua).

The purpose of taxonomies is to grow the market by making it more efficient for investors with sustainable investment goals to allocate capital. They don’t set policy or restrict financing. They provide clarity and consistency. It’s one of the many tools New Zealand can use to attract international investment.

We already have most of the solutions we need. The tools exist. The answers are in our hands. What’s required now is the courage to turn commitments into action.

There will always be noise, and there will always be competing views. But the deeper current is unmistakable: the need for climate action is urgent but so too is the opportunity for investors to reshape their portfolios for this opportunity and in doing so ensure there is an investable market in the future.