Australia’s Pension Giants to Invest $19 Billion in UK and Europe

Two of Australia’s largest pension funds, AustralianSuper and IFM Investors, have announced a landmark deal to invest $19 billion in the UK and Europe over the next five years. The deal, which was signed during the visit of Australian Prime Minister Scott Morrison to London, is expected to create thousands of jobs and support the transition to a low-carbon economy.

The investment will focus on infrastructure projects such as transport, utilities, digital and social infrastructure, as well as renewable energy sources such as wind, solar and hydrogen. The deal is part of the UK-Australia Infrastructure Partnership, which aims to foster closer collaboration between the two countries on infrastructure development and financing.

Australia’s Pension Giants to Invest $19 Billion in UK and Europe
Australia’s Pension Giants to Invest $19 Billion in UK and Europe

AustralianSuper, the largest pension fund in Australia with more than $200 billion in assets, said it would invest $10 billion in the UK and Europe, while IFM Investors, a global fund manager owned by 27 Australian pension funds, said it would invest $9 billion.

A strategic partnership to strengthen ties and trade

The deal is also seen as a strategic move to strengthen the ties and trade between Australia and the UK, as well as the broader European Union. The UK is Australia’s seventh-largest trading partner, while the EU is its third-largest. The two countries are also in the final stages of negotiating a free trade agreement, which is expected to be signed later this year.

Prime Minister Morrison said the deal was a “win-win” for both countries, as it would boost economic growth, create jobs and enhance security. He also said it was a “clear demonstration” of the shared values and interests between Australia and the UK, especially in the face of global challenges such as climate change, COVID-19 and regional stability.

UK Prime Minister Boris Johnson welcomed the deal, saying it was a “fantastic example” of how the two countries could work together to “build back better” from the pandemic. He also said it was a “testament” to the strength and depth of the relationship between Australia and the UK, which he described as “one of the oldest and closest friendships in the world”.

A positive impact on the environment and society

The deal is also expected to have a positive impact on the environment and society, as it will support the goals of the Paris Agreement and the UN Sustainable Development Goals. Both AustralianSuper and IFM Investors said they were committed to investing in projects that would deliver environmental, social and governance (ESG) benefits, such as reducing greenhouse gas emissions, improving air quality, enhancing social inclusion and promoting diversity.

The deal is also in line with the recent pledges made by both countries to achieve net-zero emissions by 2050. Australia announced its net-zero target last month, joining more than 100 countries that have made similar commitments. The UK, which is hosting the COP26 climate summit in Glasgow this week, has also set an ambitious goal of cutting its emissions by 78% by 2035 compared to 1990 levels.

The deal has been welcomed by various stakeholders, including business groups, environmental organizations and trade unions. They said the deal would not only create economic opportunities, but also help address the urgent challenges of climate change and social inequality.

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