Australia has taken a significant step forward in its sustainability journey with the release of its national sustainable finance taxonomy, developed by the Australian Sustainable Finance Institute (ASFI). This marks a major milestone in aligning the country’s financial sector with its net zero ambitions.
The taxonomy provides a Paris-aligned classification system, carefully adapted to fit Australia’s unique economic and environmental landscape. It offers financial institutions and businesses a voluntary framework to assess the credibility of green claims attached to economic activities, helping them invest confidently in projects that support Australia’s transition towards net zero.
ASFI CEO Kristy Graham said, “The release of the taxonomy marks a transformative moment for Australia’s sustainable finance market and a key achievement under the Australian Government’s Sustainable Finance Roadmap. The 20-month development process has been rigorous and collaborative, led by an independent expert decision-making body with strategic oversight from the Australian Treasury and financial regulators. It reflects deep technical input and extensive engagement across finance, industry and civil society.
“To unlock global finance for Australia’s key green and transition sectors, the taxonomy had to be internationally credible and locally relevant. In a world-first, it includes sectors such as minerals, mining and metals, and it also sets expectations for engagement with First Nations peoples and cultural heritage management. ASFI will now work with Australia’s leading financial institutions to pilot the taxonomy in real-world investment decisions.”
Dr Guy Debelle, co-chair of the Taxonomy Technical Body, highlighted the long-term importance of the framework, stating, “The taxonomy offers a clear, science-aligned guide to help direct capital towards Australia’s green economic transformation by reducing uncertainty and strengthening investor confidence. It can also evolve over time as technology, policy and the economy shift. The taxonomy’s release is the foundation for a credible and resilient sustainable finance market in Australia.”
The initial pilot programme will run over several months, involving key financial institutions such as ANZ, the Clean Energy Finance Corporation (CEFC), Commonwealth Bank of Australia, HESTA, Moody’s Ratings, NAB, Rabobank, Rest and Westpac. The pilot aims to test the taxonomy’s practical applications, refine its guidance, and gather evidence for future updates.
Meanwhile, Climate Bonds Initiative, a global authority in sustainable finance standards and a technical partner in the taxonomy’s development, has committed to integrating elements of the Australian framework into its Certification Scheme. This will ensure consistency with the Climate Bonds Standard and support international standardisation efforts.
Climate Bonds Initiative CEO and co-founder Sean Kidney said, “Australia’s Sustainable Finance Taxonomy is a shopping list of investments for the future. Climate Bonds Certification will now be able to confirm adherence to both the Australian and the Climate Bonds Taxonomies. This will support investor confidence in the credentials of sustainable financial investments.”
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