The taxonomy project is a joint government-industry initiative that will provide a common standard for green and transition finance, helping accelerate the allocation of capital towards sustainable activities to achieve Australia’s net-zero ambitions.
Australian Sustainable Finance Taxonomy Project Governance
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Taxonomy Project Governance Overview
The Australian Council of Financial Regulators’ Climate Working Group (CWG) will oversee this phase of taxonomy development, as part of its role supporting the development and implementation of the Government’s Sustainable Finance Strategy.
The CWG and ASFI have agreed on a terms of reference, which sets out the key design principles and outputs for this phase. Led by Treasury, the CWG will review outputs and provide feedback on the taxonomy’s development to facilitate alignment with the Government’s key sustainable finance policy objectives, and wider market and regulatory developments in sustainable finance.
ASFI, with endorsement from the CWG, has established a Technical Expert Group (TTEG) through an open expression of interest process. The TTEG comprises 25 experts in sustainable finance; whole-of-economy decarbonisation; climate and environmental science and policy; human rights; and Indigenous rights and perspectives. This group will provide strategic direction over, input into and endorsement of taxonomy products for consideration by Government. The first meeting of the TTEG was held on 31 August 2023.
ASFI will also undertake comprehensive stakeholder engagement as part of this work, including through the establishment of sector-specific advisory groups and a formal public consultation process.
All taxonomy project outputs, once approved by the Taxonomy Technical Expert Group (TTEG), will be published on the ASFI website. Other information related to the project, including key decisions made by the CWG and stakeholder input and feedback, will also be made public through the ASFI website.
Twenty-five senior leaders, endorsed by the Australian Council of Financial Regulators’ Climate Working Group, have been appointed to the independent TTEG.
The Taxonomy Technical Expert Group (TTEG)
The TTEG is co-chaired by Guy Debelle, former Deputy Governor of the Reserve Bank of Australia and former Chair of the Australian Council of Financial Regulators’ Climate Working Group, and Emma Herd, who has deep expertise in developing, implementing and assessing sustainable finance taxonomies, including leading the taxonomy technical team that worked with ASFI on the initial design considerations and transition methodology for an Australian taxonomy.
The TTEG provides strategic direction over, input into and endorsement of the Australian sustainable finance taxonomy for consideration by government. The TTEG collectively represents a mix of skills and experience that are critical to informing the taxonomy’s development, including in sustainable finance; whole-of-economy decarbonisation; climate and environmental science and policy; human rights; and Indigenous rights and perspectives.
The taxonomy project is a joint government-industry initiative that will provide a common standard for green and transition finance, helping accelerate the allocation of capital towards sustainable activities to achieve Australia’s net-zero ambitions. Reflecting shared appetite across government, finance and industry for new frameworks to support sustainable finance markets in Australia, ASFI is undertaking the initial taxonomy development phase, with co-funding and oversight from the Australian Government.
The taxonomy advisory groups bring together key stakeholders and experts from across policy, academia, civil society and industry to contribute technical insights and advice.
Taxonomy Advisory Groups (TAGs)
The taxonomy advisory groups will help shape:
technical screening criteria for climate mitigation across the economic sectors that have been prioritised for development;
Do No Significant Harm criteria for those same sectors; and
the application of Minimum Social Safeguards under the Australian Taxonomy.
Taxonomy advisory groups will provide input to and advice on the relevant work prepared by ASFI and its technical partners led by the Climate Bonds Initiative, before it is presented to the TTEG for consideration and endorsement and prior to public consultation.
The taxonomy advisory groups have been constituted by ASFI and will not have decision-making powers over the taxonomy’s development, but are positioned to contribute expertise and valuable input at a critical stage in the Australian Taxonomy’s development.
