Sustainable Finance Progress

Australia’s sustainable finance landscape is strengthening despite global volatility, with capital continuing to accelerate into clean energy and climate-aligned industries.

In 2025, there was meaningful progress on core reforms, including the development of the Australian taxonomy and the rollout of mandatory climate disclosures. However, the analysis points to several areas requiring urgent attention, including:

• an 11% gap to Australia’s 2035 emissions target

• underinvestment in adaptation and nature

• intensifying international competition to attract clean-industry investment.

The 2025 report outlines a clear set of priorities:

• Clearer and more consistent climate and industry policy

• Expanded taxonomy coverage

• Scaled blended-finance solutions

• Stronger environmental protections and

• A coordinated approach to clean-export growth.

This is ASFI’s first annual assessment of progress under the 2025–2027 Sustainable Finance Action Plan, a focused agenda released in May 2025 to accelerate the transition to a sustainable, resilient and inclusive economy.

ASFI’s extensive analysis further highlights the continuing need for financial institutions to deepen the integration of sustainability across governance, culture and performance frameworks, and to build the capabilities needed to embed climate and nature into lending, investment and risk.