Investors continue to dump Climate Active certifications

IFM Investors and Insignia Financial have confirmed their exit from the government's Climate Active scheme.

Launched in 2019, Climate Active certifies organisations, products, events and brands as being carbon neutral.

IFM Investors was certified under the Climate Active scheme in 2023, with some of its portfolio companies receiving the certification in the preceding year.

The asset owner withdrew from Climate Active on April 3.

While confirming the exit, IFM Investors declined to comment as to why.

Insignia Financial, meanwhile, withdrew on March 28. It had been certified under the scheme since 2022.

FS Sustainability understands Insignia Financial made the decision after bringing this capability in-house.

Meantime, a spokesperson for Perpetual confirmed it also recently withdrew. The Climate Active website shows this took place on January 24.

They're just the latest in a steady stream of investment managers dropping the initiative. Among others, Minderoo Foundation exited the scheme in January, while ECP Asset Management and Yarra Capital withdrew at the end of 2024, and HESTA and Pacific Equity Partners withdrew in June 2024.

In late 2023, the government undertook a consultation to determine the future direction of Climate Active. The review followed accusations from The Australia Institute that the scheme "may be misleading and deceptive under consumer law."

The review has been drawn out, with the Carbon Market Institute recently calling for the scheme to be reformed, not repealed - it wants to see the government double down on carbon credit integrity. The institute said it should follow global best practice, moving away from carbon neutrality and towards net zero alignment.

There is hope that the ongoing Senate inquiry into greenwashing will also provide clarity, however it too has been delayed. Referred in March 2023, the committee was given until December 2023 to report back. However, the timeline has since been extended five times; most recently, on March 25, the committee was given another four months to compile its report, now due August 5.