Submission to Treasury: Climate-Related Transition Planning Guidance
Climate transition plans are fast becoming a critical tool for companies and financial institutions to set out how they will manage climate-related risks and opportunities. To ensure Australia’s approach is clear, credible and globally aligned, the Australian Sustainable Finance Institute (ASFI) has lodged its submission to Treasury’s consultation on Climate-related transition planning guidance.
ASFI supports the development of clear, practical and internationally aligned guidance to help Australian businesses prepare, disclose and fund credible transition plans.
Our submission to Treasury:
ASFI’s submission highlights the following priorities:
Principles: Guidance should better distinguish between flexibility and ambition, and explicitly support development of credible and decision-useful transition plans.
Taxonomy use: The Australian Sustainable Finance Taxonomy is a valuable tool for transition planning. Guidance should outline how businesses can use taxonomy-aligned capital expenditure (cap-ex) to demonstrate credibility, especially in transition sectors such as mining, manufacturing and agriculture.
Clarity: The guidance should more clearly articulate government commitment to net zero, the commercial rationale for transition planning, and expectations of boards and executives.
Funding transition: Entities should be encouraged to disclose how transition plans will be funded, and government funding mechanisms should be referenced.
First Nations engagement: Guidance should reference additional resources (such as Dhawura Ngilan) and outline which sectors most intersect with First Nations rights and interests.
Carbon credits: Guidance should clarify that direct emissions reductions are prioritised over offsets, and any credits used must represent genuine reductions.
By advancing these priorities, Australia can ensure transition planning supports credible decarbonisation, resilience, and alignment with global capital markets.
Transition planning in practice
As highlighted in our submission, the Australian Sustainable Finance Taxonomy is a valuable tool for transition planning. Released in June, the Australian Taxonomy—now being piloted by 10 financial institutions—offers a valuable framework for companies to demonstrate credible progress and identify climate solutions within their sector.
To bring these priorities to life, ASFI convened experts from government and industry for a webinar exploring how credible transition planning can be supported by the taxonomy, in line with investor expectations.
Watch the webinar replay to hear how government and industry leaders are shaping credible transition planning in Australia.