ASFI Newsletter - April

28 Apr

Last week, ASFI CEO Kristy Graham attended the Treasurer’s Investor Roundtable on Clean Energy along with CEOs and Chairs from major Australian financial institutions. The roundtable was a welcome opportunity for Government and the finance sector to work together to boost investment in cheaper, cleaner, more reliable energy. The Government made a string of announcements that were welcomed by industry participants.

Chief amongst them was a decision to co-fund ASFI to lead the development of an Australian sustainable finance taxonomy. The absence of a sustainable finance taxonomy in Australia has been a significant barrier to investment in climate solutions, including clean energy, in Australia. ASFI is pleased to be working closely with government to start the development of an Australian taxonomy which will help to channel additional capital towards the climate transition. For further details on the taxonomy project, please visit our website.

The Government’s announcement was a significant step forward for sustainable finance in Australia, and an example of how government-industry collaboration can support a stronger, more prosperous and more sustainable Australia. Kristy Graham underscored the importance of this type of collaboration for accelerating the climate transition in an Op Ed featured in The Australian last week.

“Collaboration is new for many people – across the public and private sectors. And true collaboration requires a different way of working – sharing resources, knowledge and power, putting the partnership and the outcomes first beyond individual organisational objectives, investing time to get to truly know your partners and valuing the knowledge, skills and capabilities they bring. For today, neither sector can achieve its objectives without the other. It is not only desirable, it’s essential for business and government to collaborate for commerce to thrive.”

ASFI also welcomed the Government’s announcement that it will develop a Green Bonds Framework as a first step to issuing sovereign green bonds. This announcement signifies the Government’s commitment to supporting the growth and integrity of green capital markets. It will also invite greater scrutiny of the Government’s overall climate credentials, providing an impetus to move quickly on the broader sustainable finance agenda.

Finally, ASFI welcomed the Government’s announcement to update and expand a national energy performance rating scheme for existing residential properties. This followed a Joint Industry Statement that ASFI issued last week with leading Australian banks, other financial institutions and industry bodies urging state, territory and federal governments to act decisively to support home energy upgrades. You can learn more about the statement in this article from the Australian Financial Review.

Beyond these policy developments, we are proud to report that the ASFI team is continuing to grow. We are currently looking for several roles to support the delivery of our Taxonomy and TNFD & Natural Capital work programs:

Project Manager (Natural Capital). The Project Manager, Natural Capital will help to shape, deliver, and manage day-to-day operations of ASFI’s Natural Capital Partnership work plan. The successful candidate will also support ASFI’s policy input on the Australian Government’s nature positive policy agenda. For further information about this role or to apply, please click here.
Project Manager (Taxonomy Development). The successful candidate will work closely with the Taxonomy Project Lead to operationalise the taxonomy development project work plan; coordinate and review key inputs from taxonomy technical experts; undertake the secretariat functions for the key taxonomy governance institutions; plan and manage extensive stakeholder consultation including multiple advisory groups and international engagement forums. You can read the complete position description or apply for the role here.
Project Coordinator (Taxonomy Development). This role will support the Taxonomy Project Lead in a range of areas, including to operationalise the taxonomy development project work plan; coordinate and review key inputs from taxonomy technical experts; undertake the secretariat functions for the key taxonomy governance institutions; and plan and manage extensive stakeholder consultation. You can read the full position description or apply for the role here.

ASFI 2023 Work Program

Enabling Sustainable Finance

Sustainable Finance Taxonomy

As noted, ASFI welcomed the Government’s decision to co-fund ASFI to lead the development of an Australian sustainable finance taxonomy. This will build on substantial work from ASFI members together with representatives from across the finance sector since the inception of the taxonomy project in May 2022. The taxonomy will provide a common standard for 'sustainable’ and ‘transition’ finance, channelling more capital to support Australia’s climate transition and achieve Australia’s emissions targets. The next phase of the taxonomy project will encompass the development of taxonomy screening criteria for priority sectors, and associated technical work on data requirements, methodology for incorporating transitional activities, minimum social safeguards and ‘Do No Significant Harm’ framework. Scope and timing of the work will be confirmed as more detailed project planning takes place. Find out more via our website and by signing up to our newsletter.
In the lead up to the taxonomy development phase, ASFI is conducting 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.
ASFI is also continuing to showcase international developments in sustainable finance taxonomies through our taxonomy webinar series. Our next international webinar will be held on 30 May at 9:30am with the Canadian Sustainable Finance Action Council, to unpack the key recommendations in their recently released Canadian Taxonomy Roadmap report. You can register for the event here.

TNFD and Natural Capital

ASFI is continuing to engage with our members on piloting and engagement opportunities following the release of the Taskforce on Nature-related Financial Disclosures’ (TNFD) final beta framework (v0.4) and are working through a forward workplan focused on capacity uplift, and implementation.

Policy Engagement

On 28 March the Safeguard Mechanism (Crediting) Amendment Bill was passed through parliament, representing a major step forward in Australian climate policy. ASFI was pleased with this development, which followed our work with members, partners and other financial institutions to issue a Joint Industry statement urging Parliament to pass the Safeguard Mechanism reforms, and to introduce complementary measures including transition plan requirements and indicative sector decarbonisation pathways.
The March sitting weeks also saw the introduction into Parliament of the of the Nature Repair Market Bill and the passage of the National Reconstruction Fund Bill. You can view ASFI’s submissions on both of these on our website.
The Government has opened consultation on proposed reforms to the Your Future, Your Super framework, with submissions due May 2nd. In a recent briefing for members, David Bell of the Conexus Institute unpacked the reforms. He noted that while they do represent an improvement to the existing scheme, the YFYS framework would still be a serious impediment for funds looking to implement sustainability, ESG, or climate transition aligned strategies. For more on this, see a report released by the Conexus Institute, FTSE Russell with support from ASFI and RIAA in 2022.

Finance Sector Leadership

Supporting Finance Sector Leadership

Following a highly successful second session in March, ASFI’s member Working Group on ‘Organisational transformation for sustainability’ will hold its third meeting in in July to discuss ‘building a culture of sustainability’. We look forward to this and further sessions later this year, with our final session focusing on ‘leading the sector’.

First Nations and Finance

ASFI is pleased to be making progress in developing our work program on First Nations and Finance after gaining valuable input from partners and especially our brains trust group comprised of ASFI members, First Nations organisations and other industry organisations working in this area.
At its meeting in early April, the ASFI Board approved the concept note for this work program. ASFI’s work program will focus on:
Integrating Indigenous perspectives into sustainable finance, through all of ASFI’s work programs.
A flagship project to improve disclosures of First Nations outcomes and impacts. Better disclosure will enable financial institutions to manage risks and support better outcomes for First Nations people, enabling economic self-determination through their portfolios, loan books and underwriting activities. This work would build on work underway with investors to include better standards, reporting and assurance of free, prior and informed consent, Indigenous employment, Indigenous leadership and representation, Indigenous customer outcomes and the economic, social and cultural outcomes of financial products and services for Indigenous businesses and organisations.
Coordinator, convenor and connector of work happening across institutional finance in this area, to support development of additional flagship projects over time, for example to support Native Title holders to build and create wealth as financial services clients.
Policy and regulator engagement to support delivery of flagship projects and implementation of Roadmap recommendations.
Our next step for this work is to raise project funding to bring on an Indigenous Project Lead for this work, and to commence the RAP process for ASFI. Please get in touch with Kristy if you’d like to partner with us to get this work up and running.

Sustainable Finance Solutions

A key message from ASFI’s industry workshop “Finance for Home Retrofits” held in February was the need for a single national ratings framework, mandatory disclosure of home energy performance at sale and lease, and minimum energy performance standards for rental properties.
ASFI was pleased to work with major banks, insurers, and other financial institutions to release a joint statement calling for state, territory and Commonwealth governments to progress these reforms, which were agreed to in 2019 under the Trajectory for Low Energy Buildings. These are no-regrets policies that will help achieve Australia’s net zero targets while making our homes healthier and more comfortable and lowering energy bills. They should be the first step in a package of policies and programs that also includes direct support for low-income and vulnerable households.
This statement demonstrates the commitment of the Australian finance sector to achieving net zero emissions by 2050 and highlights the importance of supportive policy and regulation to unlock finance for the transition. The Government’s announcements following the Treasurer’s Investor Roundtable go some way to accelerating these important reforms. We look forward to further measures in the context of the May budget and the release of the Government’s National Energy Performance Strategy.

Events and Opportunities

We welcome your participation in upcoming public events hosted by ASFI. You can also learn about other upcoming industry events via our Sustainable Finance Events Calendar.

Events

Monday May 30, 9.30am-10:30am: ASFI Webinar: Key insights on the Canadian Taxonomy Roadmap. ASFI will host an upcoming webinar as part of our taxonomy engagement series showcasing international developments in sustainable finance taxonomies, and facilitating shared expertise and experiences. Join us to hear from Kathy Bardswick, Chair at the Canadian Sustainable Finance Action Council and Barbara Zvan, President and Chief Executive Officer at University Pension Plan Ontario, as they discuss the key recommendations for the development of a Canadian Taxonomy set out in the Canadian Taxonomy Roadmap Report. Please register here.
Save the date: October 24: Australian Sustainable Finance Summit, Hilton Hotel Sydney. 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.

There are a range of ASFI member-only events coming up in May on transition planning, please get in touch with Natalie if you are interested in joining ASFI as a member:

Thursday May 25, Sydney, 5:00pm-7:00pm: Sustainable finance in the Asia-Pacific – trends and opportunities for policy-makers and private capital. This event will feature an expert line-up of speakers, including Australia’s Ambassador for Climate Change Kristin Tilley; Minister Counsellor, Head of Trade and Economic Section EU Delegation to Australia, Cornelius Keijzer; and Senior Treasury Officials. The discussion will cover a range of topics, including global trends in sustainable finance and climate financing and how these are playing out in the Asia-Pacific region, EU sustainable finance supporting the whole of economy transition, and how Government interventions can support private finance and investment in climate and sustainability in our region.
Friday May 26, Sydney, 8:00am-10:00am: Transition Plan Taskforce (TPT) Breakfast. Attendees at this event will hear from the TPT’s Secretariat Team Leader, Jacques Morris, and a panel of finance sector representatives to unpack the UK TPT guidance, explore examples of transition plans and their value, and discuss how this might fit into the emerging sustainable finance policy architecture in Australia.

Job Opportunities

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.

Current job opportunities available:

Isobella Halcrow