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What is the Sustainable Finance Taxonomy?

  • Last week, the Australian Sustainable Finance Institute (ASFI) launched the country’s first sustainable finance taxonomy.
  • The taxonomy is a common language or type of dictionary that provides a science-based classification system that helps businesses, financial institutions and investors to identify environmentally sustainable activities and investments.

The taxonomy is tailored to Australia’s unique economic and environmental context and will initially cover six priority sectors:

  1. Agriculture
  2. Energy
  3. Minerals & mining
  4. Manufacturing
  5. Property 
  6. Transport

How does it impact financial institutions and businesses?

The taxonomy aims to help all businesses operating in the sectors covered to think about how to identify their climate-related opportunities and undertake transition planning. While voluntary, it may also support financial institutions and businesses on their journey with climate-related financial disclosures.

Why should everyday Australians care?

Australians care about a sustainable future for themselves and their families. The taxonomy is designed to create more creditability in terms of green claims, allowing individuals to have confidence that their investments are contributing to environmental goals. 

Where to next?

CommBank will be one of nine major financial institutions participating in the pilot program to test the taxonomy’s real-world applications. The pilot will help shape market guidance and refine the tool to ensure it supports credible, transparent investment in Australia’s green economic transformation.

To find out more, visit the ASFI website here. 

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