Climate transition risks: Implications for Workers’ Compensation

As part of Australia’s commitment to the Paris Agreement, Australian Federal and state governments have set targets to reduce emissions to net zero by 2050, and approximately 50% by 2030. These targets represent an economic transformation, posing risks for high-emitting sectors...

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Sharanjit Paddam, Principal, and Ruby Smith, Consultant — Finity

11 May 2026

3 mins read

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Climate transition risks: Implications for Workers’ Compensation

As part of Australia’s commitment to the Paris Agreement, Australian Federal and state governments have set targets to reduce emissions to net zero by 2050, and approximately 50% by 2030.

These targets represent an economic transformation, posing risks for high-emitting sectors and potentially giving rise to significant economic shocks, as well as opportunities for traditional industries to adapt and new industries to emerge.

However, there is a common thread between the challenges and opportunities presented by this transition; change and disruption, a once-in-a-lifetime shift in the economy and workforce.

What could the transition mean for workforces, and how should Workers’ Compensation schemes prepare?

Background to the transition

“The transition” refers to reconfiguring the economy to reduce emissions to limit global warming to well below 2°C, and to aim for 1.5°C, compared to pre-industrial levels.