Australia’s Treasury unveils Sustainable Finance Roadmap for Net Zero Transition
Photo by Natallia Safonava
Australia's Treasury department has launched its Sustainable Finance Roadmap, setting out a strategic plan to reshape financial markets and mobilise the private capital necessary for transitioning to a net-zero economy.
Key initiatives include:
- Climate Reporting Standards: The Australian Accounting Standards Board (AASB) is set to finalise climate reporting standards by August 2024. The Australian Auditing and Assurance Board (AUASB) is drafting assurance standards for these disclosures, with implementation expected in late 2024. The inaugural reporting phase for the first group of companies under the new standards will commence on January 1, 2025. Learn more with this summary article.
- Corporate Transition Plans: Guidance on the disclosure of corporate transition plans is expected to be published by the end of 2025, outlining best practices to ensure transparency and accountability. The Australian Treasury will be taking the Transition Plan Taskforce (TPT) Disclosure Framework into consideration for developing its best practice guidance. IFRS’s ISSB announced at their one year anniversary they are assuming responsibility over the TPT. What’s the TPT? Learn more with this The TPT Recommendations one pager.
- Sustainable Finance Taxonomy: The Australian Sustainable Finance Institute (ASFI) aims to complete the initial development of a sustainable finance taxonomy by the end of 2024. This taxonomy will establish criteria for assessing the sustainability contributions and alignment of economic activities, similar to the EU Taxonomy, a classification system that identifies environmentally sustainable economic activities to guide investment decisions and support the EU's climate and environmental objectives.
- Sustainable Investment Labelling: Detailed work on developing a sustainable investment labelling regime is scheduled to begin in early 2025. Legislation to enact this system will be introduced in 2026, with the regime expected to become operational in 2027. Label regimes as such aim to standardise and clarify the criteria for sustainability focused investments and mitigate greenwashing risks.
The roadmap forward aims to enhance the integrity and trust in disclosed sustainability information, steering decision-making towards achieving Australia’s net zero economy.
What does this mean for me as a business?
It’s time to start understanding your emissions and working towards an aligned net zero goal. The first step? Start carbon accounting.
