Govt’s sustainable finance strategy welcomed

Yasmine Raso

Senior Journalist, Financial Newswire

13 December 2022

The Australian Government’s announcement that it will boost climate risk reporting and develop a sustainable finance framework has received a warm welcome from the industry’s representative body, the Australian Sustainable Finance Institute.

Issuing a joint statement on behalf of its members including Allianz, ANZ, Aware Super, Commonwealth Bank of Australia, HESTA, Cbus, First Sentier Investors, Fidelity International, NAB, Westpac and others, the institute applauded the Treasurer’s commitment to an Australian Government Sustainable Finance Agenda.

“[It] is an important development that provides an opportunity to ensure that Government policy, regulation and activities are aligned to support the growth and credibility of sustainable finance and investment,” the statement said.

“We support a whole of government Sustainable Finance Agenda that promotes clear, coherent policy and regulation across climate, environment, and social issues. This would signal to the world Australia is committed to sustainability, and help maintain access to cost-effective capital, including to support the net zero transition.”

The strategy will involve a consultation process on the Government’s proposed climate disclosure framework among industry bodies and relevant organisations to standardise sustainability reporting and assist investors to make better decisions, regulators to overcome greenwashing, and companies to better manage climate risks and opportunities.

“ASFI welcomes the Treasurer’s announcements today and his commitment to supporting the growth and credibility of sustainable finance and investment in Australia,” Kristy Graham, CEO of the Australian Sustainable Finance Institute, said.

“This will generate significant additional momentum to the work that the finance sector, through ASFI, has started in this area. We, with the broader finance industry, look forward to working even more closely with Government on the development of its Sustainable Finance Strategy and to greater leadership from Government in ASFI’s work to develop a sustainable finance taxonomy.”

The industry also welcomed the creation of a “science-based, useable and internationally interoperable” classification system, the Australian Sustainable Finance Taxonomy, to help stakeholders understand what economic activities are actually environmentally sustainable.

“We welcome greater policy support for sustainable finance in Australia and are pleased to see the willingness of the finance industry to collaborate with policy makers to make a larger contribution to supporting progress on climate change,” Andrew Lockhart, Managing Partner at Metrics Credit Partners, said.

“The initiation of a consultation process on the Government’s proposed mandatory climate-related disclosure regime is a welcome step toward the introduction of comprehensive sustainability reporting. Mandatory disclosure would provide investors such as Metrics with more data to better identify and manage sustainability-related risks and opportunities.”

“The FSC is pleased the Government is moving forward with its election commitment to introduce climate-related financial disclosure standards in Australia and the Treasury consultation paper released today is an important initial step,” Acting CEO of the Financial Services Council (FSC), Spiro Premetis, said.

“The FSC has been calling for a mandatory climate risk reporting regime which would require companies to report climate-related financial risks and opportunities. Having consistent and globally interoperable reporting of climate risk across Australian companies is vital in ensuring that investment decisions can be made in the best long term financial interest of Australians.

“A mandatory climate risk reporting regime is needed if Australia is to meet its national emissions reduction targets. It will lead to better quality and more consistent disclosures across the economy and a more efficient allocation of capital toward sustainable investments.”