ASFI Taxonomy Pilot Report: Unlocking Private Capital for the Transition
Unlocking Private Capital for the Transition: Market insights from the practical application of the Australian Sustainable Finance Taxonomy is the latest paper from the Australian Sustainable Finance Institute (ASFI).
Drawing on the experiences of ten major financial institutions participating in ASFI’s Taxonomy Implementation Program, the report captures how the Australian Sustainable Finance Taxonomy is being used in practice to guide credible investment decisions and mobilise private capital for Australia’s transition.
These early market insights highlight strong demand to expand the taxonomy to include climate adaptation and resilience, alongside clear calls for regulatory guidance, international interoperability, and long-term governance to build confidence and accelerate adoption.
Early Market Insights
The findings identify key opportunities for strengthening taxonomy adoption and increasing capital flows toward sustainable investment in Australia.
The Australian taxonomy has strong market value, but further guidance is needed to ensure widespread uptake.
The Australian taxonomy’s coverage should be expanded to address other environmental objectives. Climate change adaptation and resilience is a first-order priority.
Ongoing engagement with key international partners, to ensure the Australian taxonomy’s interoperability, is important to removing barriers to cross-border investment in Australia’s transition.
There is strong consensus among taxonomy users that an enduring shared public–private governance model is integral to the Australian taxonomy’s long-term success
Key enablers
These insights reveal four enablers to drive adoption and unlock capital at scale:
Regulatory guidance and clarity — particularly in labelled debt — is critical enhance confidence and unlock capital flows
Credible taxonomy criteria for adaptation and resilience offer a low-cost, high impact opportunity to mobilise private capital.
Active international engagement on taxonomy interoperability is essential for global market recognition and use of the Australia’s taxonomy.
Strong governance and long-term institutional arrangements are needed to build market confidence and unlock private capital
Recommendations to Government:
Expand the taxonomy to include adaptation and resilience as an immediate priority.
Step up international engagement to shape emerging global standards in Australia’s interests.
Establish enduring governance arrangements to ensure long-term credibility and usability.
Together, these actions can help ensure the Australian Sustainable Finance Taxonomy fulfils its purpose, providing clarity, confidence and consistency to direct finance toward activities that will deliver decarbonisation, resilience and long-term prosperity.