The Australian government will co-fund the development of a national sustainable finance taxonomy, in co-operation with the Australian Sustainable Finance Institute (ASFI).
Federal Treasurer Jim Chalmers made the announcement at the Treasurer’s Investor Roundtable, which brought together CEOs from Australian banks, superannuation funds and asset managers to discuss barriers and opportunities for investing in clean energy.
The taxonomy will look to provide a common standard for sustainable finance, in doing so moving capital towards supporting Australia’s climate transition and helping the country achieve its emissions targets.
The announcement follows the release of ASFI’s paper last month “Designing Australia’s sustainable finance taxonomy” which called for a science-based, accessible and internationally coordinated taxonomy.
Kristy Graham, chief executive of the ASFI, said: “The absence of a sustainable finance taxonomy in Australia has been a significant barrier to investment in climate solutions, including clean energy. We’re pleased to be working closely with government to start the development of an Australian taxonomy which will help to channel additional capital towards the climate transition.”
The first phase of the Australian taxonomy focuses on key framework design elements, amid analysis of Australia’s economic and environmental context, and is due to finish on 30 June this year. The second phase will develop taxonomy screening criteria and a “Do No Significant Harm” framework itself modelled on the EU taxonomy for sustainable activities.
As of 1 July, the ASFI will convene a Technical Expert Group for further development of the taxonomy, comprising of experts in sustainable finance, climate science, industry, policy and Indigenous representation to oversee the development of screening criteria.
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