ASFI March Update
In December 2022, ASFI released our ‘Australian Framing Paper: Designing Australia’s sustainable finance taxonomy’ as a draft for public consultation. Today, we are proud to share the final paper providing recommendations on the design of an Australian sustainable finance taxonomy, and the roadmap and timeline for its development. ASFI received strong stakeholder engagement during our public consultation, which included multiple webinars and briefings, as well as 56 written survey responses from key stakeholders across the finance sector, industry, civil society, not for profit and real economy actors. Thank you to everyone who engaged in the consultation process.
ASFI’s public consultation found broad consensus on the key design elements of an Australian taxonomy, including that scientific credibility should underpin the development of the taxonomy, and that the taxonomy must be usable. Consultations also confirmed strong support for the inclusion of a transition category. The consultation paper proposed several methodologies for defining this category. While the consultation process did not reveal strong preference for any particular methodology, the input received will be used in further design and consultation as we progress the taxonomy development later this year.
Earlier this month, a number of ASFI’s members and partners were recognised in The Australian’s 100 Green Power Players for 2023 list. This recognition highlights the growing acknowledgement of the sustainable finance agenda and its critical role in achieving Australia’s climate and broader sustainability objectives. We were also pleased to see the recognition of ASFI’s role in driving, collaborating, and accelerating the sustainable finance agenda through the inclusion of our CEO, Kristy Graham, on the list.
ASFI, along with other finance sector bodies and a number of our members, have released a Joint Statement on the Safeguard Mechanism reforms. The Statement supported the proposed reforms and proposed three complementary measures: mandatory transition plans for large firms, indicative sector decarbonisation pathways to be produced by the Climate Change Authority, and future Safeguard baselines to align with 1.5 degree trajectories. We were pleased at the response the Statement received, including Minister for Climate Change Chris Bowen’s comments on RN Breakfast that indicated openness to developing transition plan requirements and guidance. The minister also acknowledged finance industry support for the passage of the Safeguard Mechanism Bill in parliament last week, quoting ASFI CEO Kristy Graham:
“[The Safeguard Mechanism reform] will provide an important signal to international investors, lenders and insurers that Australian climate policy is continuing to strengthen and enable Australia to attract capital to support the climate transition.”
ASFI has introduced ‘Sustainable Finance Job Alerts’, where you can subscribe to receive updates about new opportunities available on the Sustainable Finance Jobs Board, available on the ASFI website. If there are sustainable finance job opportunities you would like to advertise to ASFI’s network of sustainable finance, responsible investment and sustainability experts and practitioners, please complete this form.
ASFI 2023 Work Program
Enabling Sustainable Finance
Sustainable Finance Taxonomy
As noted, our final taxonomy paper providing recommendations on the design of an Australian sustainable finance taxonomy, and the roadmap and timeline for its development, has now been published.
As we move into the development phase of the taxonomy, ASFI is continuing to engage with government on the governance for taxonomy development in line with the implementation roadmap set out in our report.
In the lead up to the taxonomy development phase, ASFI will conduct further consultation and analysis on the design of the transition methodology, through the development of real-world case studies that are applicable to different segments of the financial sector.
TNFD and Natural Capital
This week, the Taskforce on Nature-related Financial Disclosures (TNFD) will release its final beta version (0.4) which will include an initial set of draft sector and biome guidance for market participants. The v0.4 release will also include further draft guidance on the TNFD disclosure recommendations, disclosure metrics, stakeholder engagement, scenarios, risk assessment methods, response metrics and target setting, for feedback and pilot testing ahead of the deadline for all feedback on 1 June 2023.
Policy Engagement
As outlined above, ASFI has been actively engaging with Government, members, and others across the sector on the Australian Government’s Safeguard Mechanism reforms. Earlier this month, we released a joint industry statement with leading Australian financial institutions and finance industry peak bodies on the proposed reforms.
The UK Transition Plan Taskforce (TPT) recently closed consultation on its draft Disclosure Framework and Implementation Guidance. The TPT aims to develop the ‘gold standard’ for private sector transition plans. ASFI made a submission jointly with Chartered Accountants ANZ, the Investor Group on Climate Change, and CPA Australia. The submission noted the value of this work for international jurisdiction and made some suggestions for additional areas of focus. ASFI sees the TPT work as providing a strong basis for Australia to develop guidance under our climate-related disclosures framework and has encouraged the Australian Government to develop this guidance in 2023.
Finance Sector Leadership
Supporting Finance Sector Leadership
ASFI’s member Working Group on ‘Organisational transformation for sustainability’ held its second meeting last week, and its first for 2023. The session focused on overcoming the capability gap, with working group members sharing experiences, challenges and lessons on how they are overcoming the capability gap within their organisations to support implementation of their sustainability commitments.
We look forward to holding further sessions this year, which will focus on building a culture of sustainability and leading the sector.
First Nations and Finance
Following the first meeting of our First Nations Brains Trust Group last month, we are currently in the process of further developing this work stream, including working towards delivering on the recommendations in the Roadmap relating to self-determination and reshaping the financial system to better serve First Nations clients and communities. More information to come soon on how members and other partners can get involved in this work.
Events
We welcome your participation in ASFI’s upcoming public events, which are listed below. You can also learn about other upcoming industry events via our Sustainable Finance Events Calendar.
October 24: Australian Sustainable Finance Summit. Australia’s premier event in sustainable finance will bring together leaders from across finance, policy, and civil society to share their insights and identify opportunities to accelerate progress. Sponsorship opportunities are now open, please contact Natalie for our sponsorship prospectus or to discuss further.