Bridging borders: Fostering taxonomy alignment between Australia and Indonesia
L-R: Najwa Abu Bakar and Eugene Wong (Sustainable Finance Institute Asia), Nicole Yazbek-Martin (ASFI), Pak Joko Siswanto and Pak Jarot Suroyo (Indonesia’s Financial Services Authority, OJK), and Amy Leaver (Treasury Prospera)
This month, Nicole Yazbek-Martin, Head of Taxonomy and Natural Capital, and Jackson Rowland, Program Manager; Capability, were on the ground in Indonesia exchanging valuable knowledge on sustainable finance taxonomies with Indonesian Government representatives. This collaborative forum provided an opportunity for ASFI and our Indonesian colleagues to work together to share challenges and learnings on sustainable finance taxonomies and support our collective climate and sustainability goals.
Sustainable finance taxonomies and the importance of regional interoperability
Sustainable Finance taxonomies are increasingly seen as crucial frameworks to both increase consistency around how sustainability credentials of assets and portfolios are assessed and measured across the finance sector; and to mobilise capital flows towards sustainability activities and assets.
Across our region, several jurisdictions have developed their own sustainable finance taxonomies, and have an ongoing focus on increasing their adoption and effectiveness. This includes Indonesia, which recently released the second version of its sustainable finance taxonomy and are now looking at how to maximise adoption and achieve its objectives.
Given that capital markets are global, international alignment between sustainable finance taxonomies in different jurisdictions is critical. For Australia, regional collaboration ensures interoperability and is important for attracting private capital to support our climate and other sustainability goals.
The Australian sustainable finance taxonomy project, led by ASFI in partnership with the Commonwealth Treasury, builds upon work done on sustainable finance taxonomies internationally to ensure international credibility and interoperability. It coordinates with the development of taxonomies in other jurisdictions, across the Asia-Pacific region, the European Union, Canada, and the United Kingdom.
Opportunities to share and learn from partners in our region, such as Indonesia, is vital for driving this alignment between international approaches.
Outcomes and reflections from Indonesia
Participants from ASFI, Indonesia’s Fiscal Policy Agency (BKF) and Financial Services Authority (OJK).
During this collaborative forum, ASFI came together with participants from Indonesia’s Fiscal Policy Agency (BKF) and Financial Services Authority (OJK) to share technical knowledge of taxonomies. This included building a shared understanding of the fundamental components of sustainable finance taxonomies, how taxonomies are used in practice by business and industry to facilitate green capital flows, and the impacts and opportunities for regulators and policymakers.
These sessions helped to further develop regional synergy, and ensure that Australia remains responsive to the needs of its regional partners.
Overall, the trip highlighted the critical need for regional collaboration on sustainable finance to ensure that our financial systems support a sustainable and resilient future for all, and the opportunities to accelerate green capital flows by working together across the region. ASFI looks forward to continuing this engagement as taxonomy adoption across our region grows.
Learn More
The Australian sustainable finance taxonomy project is a joint industry-government initiative to develop an Australian sustainable finance taxonomy. Building on work done on sustainable finance taxonomies internationally, this project works with experts and stakeholders across the Australian financial system to design and develop an Australian sustainable finance taxonomy that is credible, usable, and internationally interoperable, while reflecting the Australian economy and context. To dive deeper into the Australian sustainable finance taxonomy project and stay updated on our progress, visit https://www.asfi.org.au/taxonomy