Macquarie CEO Shemara Wikramanayake lifts the lid on the bank’s global green energy vision

In a rare interview, the Macquarie Group chief reveals its highly calculated approach to renewables investment and the discussion with her teenagers that crystalised the need to take action.

Macquarie Group’s boss Shemara Wikramanayake at the banking giant’s HQ in Sydne Picture: Jonathan Cami

After spending several weeks locked in the high octane world of climate diplomacy at Glasgow’s COP26, Macquarie Group’s boss Shemara Wikramanayake returned to Sydney to face an equally difficult conversation: answer­ing to her teenage son and daughter about how negotiations had progressed.

She recalls the moment, which crystallised for her the importance of taking action and finding solutions to the challenge of climate change. “We are accountable to that younger generation but the thing is they can, at this point in their lives, only help us with awareness and asking us to get on and act,” Ms Wikramanayake says.

“And what our generation has to do is not carry on saying ‘Oh there’s a problem’… we have to get on with the solution. We need to not do this precipitously and cause disruption and blow the whole thing up, so it’s our responsibility to be the adults.”

The homegrown asset management and banking giant is among the biggest backers of projects boosting clean energy generation around the world and it’s only just getting started, according to its Sydney-based chief.

Macquarie was an early mover in the global renewable energy sector and has positioned itself to benefit from the mammoth transition now taking place.

Green Investment Group is in 25 markets across the world and has committed or arranged more than $16bn in investments since Macquarie acquired it from the British government in 2017.

It remains pragmatic about the energy transition, however, and continues to weigh investments in more traditional sources. Macquarie in February emerged as a bidder for a majority stake in Britain’s National Grid gas transmission business, which may value the asset at more than $US10bn, and famously cashed in a year ago when the Texas power grid froze.

While a notable backer of the net-zero emissions by 2050 commitment, Ms Wikramanayake cautions that the transition needs to happen in a measured way as a debate heats up over the pace of coal disappearing from Australia’s electricity grid.

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“If we try to make that happen overnight, what we’ll do – Australia is 70 per cent coal-fired energy – we won’t have energy, we’ll have blackouts and potentially have backlash, especially job losses as well, and lose the mandate to drive this transition if we don’t do it in a considered way,” she says.

The Macquarie chief’s views on hydrogen and carbon capture also contrast starkly with those of billionaire and Fortescue Metals chairman Andrew Forrest. The iron ore magnate is a supporter of green hydrogen – made using renewable energy sources – but has slammed the process of carbon capture to store emissions from fuel production, arguing it fails 19 out of 20 times.

Macquarie continues to back the sometimes maligned technology. “I don’t think we’re going to get to the net-zero that we’re targeting without taking carbon emissions out of the atmosphere, so we are looking at what role we can play in that,” Ms Wikramanayake says.

“The economics, as Andrew Forrest says, are variable and the big thing you need to have is storage close to the industry for it to be economically viable.

“CCUS [carbon capture, utilisation and storage] is not only something we need to use to complement all the other technologies we have, but in harder-to-abate sectors such as steel and cement, it’s critical to have in place carbon capture … to help them decarbonise.”

Ms Wikramanayake has played a central role in helping build out the firm’s now 300 renewable energy projects in markets across the globe.

Macquarie’s first investments in renewables were almost two decades ago. They spanned European and British projects across biomass, wind and solar, through Macquarie’s first European infrastructure fund.

Now, as Macquarie’s chief executive since 2018, Ms Wikramanayake’s global renewable energy agenda is moving at pace, although each bet is very carefully calculated.

The company is increasingly active in newer areas including floating solar and wind projects, converting waste to energy, digital emission tools for farmers and hydrogen-powered buses and trucks.