Consultation process for Australian taxonomy commences
28 May 2024, Canberra: The Australian Sustainable Finance Institute (ASFI) has today released a public consultation paper for the Australian Sustainable Finance Taxonomy (the Taxonomy). The paper invites feedback from stakeholders on the first three priority sectors for the Taxonomy: the built environment; minerals, mining and metals; and electricity generation and storage.
A taxonomy is a classification tool that offers a credible, consistent assessment of whether an economic activity is climate aligned. It is designed to support market transparency, tackle greenwashing and increase investor confidence.
Once developed, the Australian Taxonomy will provide a common language to help companies, investors and the wider community confidently assess the credibility of green claims and allocate capital for the climate transition. The Australian Government has identified the development of an Australian Taxonomy as a key priority in its sustainable finance agenda.
The Australian Taxonomy’s initial development phase is being led by ASFI in partnership with the Australian Commonwealth Department of Treasury. The initial development phase will cover climate change mitigation across six economic sectors.
Kristy Graham, CEO of ASFI said: “The Australian Taxonomy’s development is being guided by the principles of credibility; usability; interoperability; and prioritising coverage of activities that will drive the greatest climate change mitigation outcomes. The Taxonomy’s development has strong support from the Australian finance sector and the Australian Government.
“A credible, internationally interoperable and useable Australian Taxonomy will support the growth and credibility of sustainable finance and investment in Australia, and help ensure Australia remains an attractive destination for investment to enable the net zero transition.
“The Taxonomy will support Australia to play a stronger international role on sustainable finance, and help ensure we are a standard setter not a standard taker. The Australian taxonomy includes a classification for ‘transition’ activities as well as ‘green’ activities – helping to direct capital towards those sectors that need significant investment for the transition consistent with sciencealigned decarbonisation pathways. The inclusion of mining criteria in the Australian Taxonomy is a world first and will help define and recognise sustainable mining practices to support Australia’s green export superpower vision.
“The taxonomy has been through an extensive co-design process with key stakeholders from the industry to ensure that it is both high integrity and fit for purpose for the Australia context.
“ASFI is now seeking feedback on draft taxonomy criteria for the first three sectors to ensure that the appropriate settings have been identified in the Taxonomy.”
ASFI has taken a rigorous and collaborative approach to the Australian taxonomy’s initial development phase, drawing on diverse stakeholder and technical input and views. ASFI and its technical teams, led by the Climate Bonds Initiative, seek targeted advice, input and feedback on initial draft taxonomy products through sector and subject-specific taxonomy advisory groups. For information on the governance of the Australian taxonomy see https://www.asfi.org.au/taxonomygovernance
Feedback received during this consultation will inform the next iteration of the draft taxonomy, which will undergo a second round of public consultation in Q4 2024. ASFI will publicly consult on the draft climate change mitigation criteria for additional priority sectors; a Do No Significant Harm framework; Minimum Social Safeguards; and proposals around the taxonomy’s implementation.