This wasn’t just a number plucked from thin air. It reflects the latest science, credible economic modelling, and a realistic pathway forward.  

It’s bold, yes. But we believe it’s achievable if government, business and investors were to move with clarity and purpose.

We think there’s never been a more important time to take bold action, in light of the Federal Government’s National Climate Risk Assessment report, which details the potentially catastrophic effects climate change could have on our communities and living standards if we don't move now to cut emissions. 

A lower or less ambitious target is still a step towards a lower carbon future. As long-term investors we continue to seek out new and compelling investment opportunities that align with our purpose to invest for a better world, both in Australia and abroad. 

What the 85% target actually means

An 85% reduction means cutting Australia’s greenhouse gas emissions by 85% below 2005 levels by 2035. 

Why 2005? That’s the international benchmark Australia uses to track progress under the Paris Agreement. It’s when our emissions peaked, giving us a clear starting point for measuring change. 

Source: Department of Climate Change, Energy, the Environment and Water

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In practical terms, it means we’d be producing significantly less emissions than we did two decades ago as a country.  

To get there, we’ll need to continue to innovate, scale up clean energy production, connect renewable infrastructure to our grids, electrify transport and industry, as well as invest in nature and technological solutions to get to the hard to abate emissions. 

We know where emissions can be eliminated or chipped away – the grid and households, followed by transport, are the areas where we can make the most progress.  

At Australian Ethical, our Ethical Charter guides us to restrict the heaviest emitters and companies responsible for extracting fossil fuel, which are hampering progress towards Australia’s agreed emissions reduction targets.

We are also continually looking for opportunities to invest in climate-positive technologies and renewable energy infrastructure businesses, an investing thematic that is strengthened by this shift towards decarbonisation and electrification. 

We continue to see opportunity to invest in this mega-trend, if the government lands on an 85% target, or somewhere lower. In addition to looking in Australia, we continue to explore opportunities overseas to find new investments that will generate returns for our investors as we head towards a lower carbon future.   

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How we landed on 85%

The figure comes from detailed modelling by Climateworks Centre and CSIRO¹. Their analysis looked at every sector of the economy – energy, transport, agriculture, industry and land use – to test what’s possible and plausible with existing and emerging solutions. 

Another big part of how we landed on this number is the progress already made by the Australian states, and the potential for further this progress to be accelerated when galvanised under a national target. 

Victoria is already targeting 75-85% cuts to GHG emissions by 2035, Queensland is aiming for 75% and NSW is aiming for 70%^2,3. We expect a national target will help unify and amplify the states’ efforts – overall the states committed to targets that could collectively reduce emissions by up to 71% by 2035⁴.  

We are also continually looking for opportunities to invest in climate-positive technologies and renewable energy infrastructure businesses, an investing thematic that is strengthened by this shift towards decarbonisation and electrification. 

At Australian Ethical, our Ethical Charter guides us to restrict the heaviest emitters and companies responsible for extracting fossil fuel Australia behind its agreed emissions reduction targets.

Why are we calling for this now?

When Australia became a signatory under the Paris Agreement in 2015, we agreed to submit our Nationally Determined Contributions (NDCs) to the United Nations every five years, and Australia’s next NDC is due in September 2025. 

The government will be acting on formal advice from the Climate Change Authority to set this target. The reduction proposal the CCA has put out for consultation is in the 65-75% band range. We don’t think this is ambitious enough, even at the higher end of the range. 

Limiting warming to the levels that lessen that chance of more frequent and catastrophic natural disasters required deep and rapid cuts to emissions this decade. We believe an 85% target by 2035 is consistent with the pathways that keep us on track⁵ and while we acknowledge that setting an ambitious target might not make a difference on its own – there needs to be global progress towards a common goal – we think being ambitious matters to inspire and role model for others. can encourage others to do the same.

Every year we delay, the emissions cuts needed get steeper, costlier and harder. Moving now makes the transition smoother and avoids locking in high-emissions infrastructure that will hold us back. 

Do good by being bold

Rather than seeing an ambitious emissions reduction target as a handbrake, we see it as a way to position Australia’s economy and at the heart of the clean energy boom. An ambitious target will accelerate investment in renewables, low-emissions manufacturing and emerging industries, which are already ticking along on the back of a record year in new clean energy investments last year⁶. 

We wrote the open letter to the PM, not only because it aligns with our vision and purpose – to invest for a better world, where money is a force for good – but also because it makes economic and financial sense, and it’s the right thing for people, planet and animals. 

We also acknowledge this NDC target is a stepping stone to a much larger goal. As long-term investors we continue to look through the short-term noise to invest for a better world.