Australian finance sector picks EY to support green taxonomy work

Australian Sustainable Finance Initiative appoints auditing giant after call for proposals.

EY has won a tender to help develop Australia’s green taxonomy.

The financial services firm was selected by the Australian Sustainable Finance Initiative (ASFI) as part of its efforts to create an “industry-led” taxonomy – something it said earlier this year would be a priority for 2022.

The group has also appointed Nicole Yazbek-Martin, ex- director of financing solutions for nature at Australia’s Department of Climate Change, Energy, the Environment and Water, to oversee the project.

In May, the initiative put out a request for proposals from consultants “with the appropriate skills, knowledge, expertise and leadership credentials” to support the first phase of the project. At the same time, it named 44 experts that would provide technical input – including Emma Herd, who stepped down as CEO of the region’s Investor Group on Climate Change last year to become a climate change and sustainability partner at EY.

The initiative also named Fiona Reynolds, former CEO of the Principles for Responsible Investment and ESG adviser at fellow Big Four firm PwC, to its board.

ASFI declined to provide further details on the agreement with EY or how many consultants submitted requests, saying relevant people were on annual leave at the time of publication.

EY will work with ASFI’s technical expert group to assess international developments before establishing guiding principles and recommendations for the creation of an Australian taxonomy. ASFI said the framework must be science-based to ensure “international credibility”, adding that it “will build on work underway in other jurisdictions to ensure international interoperability, while ensuring the taxonomy is fit for purpose in an Australian context”.

Kristy Graham, ASFI executive officer, stated: “It has become clear from discussion with members, regulators, government and the finance sector more broadly that there is strong demand for ASFI to drive an industry-led process to develop a sustainable finance taxonomy for Australia.”

Earlier this year, Canada abandoned plans for its own industry-led taxonomy, citing “fundamental differences of opinion” between its architects on what a climate transition should look like in the national context. Other jurisdictions have opted for ‘top-down’ approaches, through which the regulators or governments develop the framework rather than members of the finance sector.