Australian framing paper: Designing Australia’s Sustainable Finance Taxonomy
This paper provides recommendations on the design of an Australian sustainable finance taxonomy, and the roadmap and timeline for its immediate development. The paper is informed by stakeholder consultation, the Australian economic and environmental context and insights gained through the development of the taxonomy project’s Scoping paper of international taxonomies.
The key recommendations include:
The development and implementation of an Australian taxonomy should be guided by the core principles of credibility, usability, interoperability, prioritisation and impact.
The taxonomy should be underpinned by internationally recognised, credible, science-based technical screening criteria.
Australia should include a transition category based on a transparent methodology and adopt a traffic-light colour coding framework to communicate and distinguish between green activities, transition activities and excluded activities.
Australia should develop “do no significant harm” criteria that meets our unique needs, including standards for respecting Indigenous rights and heritage.
A robust, transparent governance model should be adopted for the development of the taxonomy with joint leadership and commitment from Government and the financial sector to safeguard and prioritise scientific integrity and ensure market credibility and usability.
To assist with addressing greenwashing, reporting on taxonomy alignment should be mandatory where users are seeking to make claims around the sustainability objectives covered by the Taxonomy.
Australia should cover all key sustainability objectives. However, recognising that climate change mitigation is the most urgent priority and should be prioritised first, with the view to incorporating the other environmental and social criteria over time in accordance with the core design principles.
This paper has been published as a draft for public consultation.
Please find the report here and the press release here.
We welcome your feedback on the recommendations.
You can provide feedback via the survey until COB 17 February 2023.