Aussie government to join EU’s international taxonomy group amid finance sector pressure

Australian treasury tells RI that it will join the International Platform on Sustainable Finance as part of 'efforts to increase engagement on climate and sustainability-related issues'.

The Australian government has told Responsible Investor that it intends to join the EU’s International Platform on Sustainable Finance (IPSF), a step recently identified as a priority by the country’s finance sector.  

The IPSF was launched in 2019 to support and influence the development of a common approach to sustainable finance globally. It consists of the EU and 18 other jurisdictions, including China, Japan and the UK, representing 55 percent of global GDP as well as greenhouse gas emissions.  

One of its key deliverables is the creation of a Common Ground Taxonomy, a framework that seeks to bring more clarity and transparency around the similarities and differences between taxonomies being developed in different jurisdictions, starting with an in-depth comparison between the EU and China taxonomies.

Last week, the Australian Sustainable Finance Initiative (ASFI), a finance sector-led initiative, wrote in its second progress report that, by joining the ISPF, the Australian government “would increase its influence in setting global norms, particularly on transition finance and taxonomies”. 

The action was identified as one of the “quick wins to be had” and one of the “critical gaps that should be prioritised”.   

Responding to a question on the likelihood of this step being taken, a spokesperson for the Australian treasury told RI that the government intends to join the platform “as part of its efforts to increase engagement on climate and sustainability-related issues”. 

ASFI’s progress report also called on the government to develop its own sustainable finance strategy to “identify and prioritise the policies, programmes and initiatives needed to support and drive sustainable finance in Australia”. 

The Treasury spokesperson also said that the treasurer is scheduled to address an ASFI event on 12 December “where he will discuss the government’s climate disclosure commitments and wider priorities in sustainable finance”. 

A taxonomy tailored to the Australian context is currently being developed by the ASFI. The body’s executive director, Kristy Graham, recently told RI that its framework will likely include a transition category that will ramp up over time.    

In October, ASFI published a taxonomy “framing paper” outlining key considerations that will inform the development of the Australian framework.