New voluntary taxonomy offers clear, science-based criteria to guide green and transition finance across Australia’s economy.
Backed by government and regulators, the framework was developed through 20 months of industry, finance, and civil society consultation.
Major institutions to pilot the taxonomy, including ANZ, Westpac, NAB, and CEFC, aiming to accelerate capital flow into net zero-aligned investments.
Australia has released its first sustainable finance taxonomy, providing a science-aligned, Paris-compatible framework to steer investments toward net zero. Developed by the Australian Sustainable Finance Institute (ASFI) with strategic oversight from the Treasury and regulators, the taxonomy marks a major step under the Government’s Sustainable Finance Roadmap.
“This release marks a transformative moment for Australia’s sustainable finance market,” said ASFI CEO Kristy Graham. “The 20-month development process has been rigorous and collaborative… reflecting deep technical input and extensive engagement across finance, industry, and civil society.”
The taxonomy is voluntary and tailored to Australia’s unique environmental and economic landscape. It classifies economic activities based on their alignment with climate goals, enabling investors to confidently assess green claims and direct capital to credible transition projects.
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Notably, the framework is the first globally to include high-emission sectors like minerals, mining, and metals, while also embedding expectations around engagement with First Nations peoples and cultural heritage.
“To unlock global finance for Australia’s key green and transition sectors, the taxonomy had to be internationally credible and locally relevant,” Graham added.
A pilot program involving leading institutions—such as ANZ, Westpac, NAB, the Clean Energy Finance Corporation (CEFC), and HESTA—will test the taxonomy over the coming months. The results will inform future guidance and help refine the tool for broader market adoption.
Dr Guy Debelle, Co-Chair of the Taxonomy Technical Body, emphasized the framework’s long-term value: “It offers a clear, science-aligned guide to help direct capital towards Australia’s green economic transformation by reducing uncertainty and strengthening investor confidence.”
The Climate Bonds Initiative, a technical partner in the project, has committed to expand its Certification Scheme to align with the Australian taxonomy, advancing international harmonization and boosting investor confidence.
“The taxonomy’s release is the foundation for a credible and resilient sustainable finance market in Australia,” Debelle concluded.
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