Treasury Corporation of Victoria case study: Strengthening eligibility criteria and supporting transparency
Treasury Corporation of Victoria (TCV)
Organisation Type
Central Financing Authority
Sustainability Reporting
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Experience piloting the Australian taxonomy
TCV has adopted a pragmatic and iterative approach to using the taxonomy, rather than presenting our Sustainable Bond Framework as fully aligned. The taxonomy technical screening criteria has been used as a reference point to strengthen TCV’s eligibility criteria where it is relevant and feasible, recognising that our Framework spans climate, environmental and social objectives while the taxonomy currently focuses on climate mitigation.
In practice, this has resulted in enhanced eligibility criteria across project categories, informed by the taxonomy’s science-based technical screening criteria alongside established market standards such as the ICMA Green Bond Principles and Climate Bonds Initiative standards.
For selected sectors including renewable energy, clean transport and energy efficiency, TCV has aligned criteria with relevant taxonomy technical screening criteria, while clearly disclosing areas of partial alignment.
For example, in green buildings, only selected elements of the technical screening criteria, such as no onsite fossil fuel combustion (except for backup generation) and the application of minimum GBCA Green Star and/or NABERS energy ratings are currently applied due to commercial and technical constraints. Similarly, sectors not yet covered by the taxonomy, such as water, continue to rely on alternative standards and guidance.
Overall, the taxonomy has strengthened eligibility criteria for project evaluation and provided a structured reference that can support continuous enhancements.
The Australian taxonomy’s value for central financing authorities
Over time, the taxonomy can support central financing authorities by providing a consistent, science-based framework for assessing and classifying sustainable expenditures. This helps strengthen credibility and transparency in sustainable bond frameworks for project evaluation and eligibility assessment.
The taxonomy also offers a common reference point that supports comparability across jurisdictions and issuers. This is particularly important for issuers like TCV, as investors increasingly seek consistency with recognised classification systems and clearer evidence that proceeds are allocated to activities aligned with green and decarbonisation outcomes.
Importantly, a progressive, non-prescriptive approach allows central financing agencies to build capability over time. Rather than requiring immediate full alignment, the taxonomy can be embedded iteratively, supporting practical implementation while accommodating sector-specific constraints and varying levels of market maturity.
As the taxonomy evolves and expands in scope, it could become an increasingly important benchmark for refining eligibility criteria and guiding future investment decisions.
How the Australian taxonomy can support capital allocation for Australia’s transition to net zero
At a system level, the taxonomy’s aim is to play a key role in directing capital towards activities that support Australia’s transition to net zero by providing a credible, science-based classification framework. It establishes a common language for sustainable finance and enhances market transparency and build investor confidence.
By improving consistency and comparability across issuers and sectors, the taxonomy can support more efficient capital allocation to green and decarbonisation activities. Over time, it is expected to facilitate a shift from transitional activities toward fully green-aligned investments as the economy progresses towards net zero.
Its ongoing development, including broader sustainability objective coverage, iterations to incorporate practical implementation feedback and alignment with international standards will be important to continuing to support market uptake and the scaling of sustainable finance in Australia.