Australia’s Sustainable Finance Strategy

Overview

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Australia's Sustainable Finance Strategy submission to Treasury

Australia’s Sustainable Finance Strategy is a submission to Treasury’s consultation paper outlining the proposed strategy, and draws on CPD’s long history of work aligning financial systems with the reality of decarbonisation. The submission was authored by Toby Phillips and Mara Hammerle as part of the work of our Sustainable Economy Program.

Over the last decade has made significant contributions to the way financial disclosures and public sector management can better work in tandem with Australia’s energy transition goals, as well as how economic institutions – such as the RBA and Future Fund – can more meaningfully integrate climate risk into their decision making.

Download The Submission

Download the Australia’s Sustainable Finance Strategy submission to Treasury to read the full paper.

Summary of recommendations

The submission makes a number of recommendations around how the government can improve transparency on climate and sustainability, build financial system capabilities and enhance their leadership and engagement in the sector.

Recommendations include:

  • Develop a sustainable finance taxonomy: Institutions such as the RBA and Future Fund should use this taxonomy to classify their holdings and assess their climate-related financial risks.
  • Support credible net zero transition planning: The government should publish at least one central climate transition scenario that entities must report against, and provide forward looking parameters for use in transition planning and disclosures.
  • Enhance market supervision and enforcement: The government must support regulatory frameworks with resources for strong enforcement to regulate greenwashing.
  • Identify and respond to potential systemic financial risks: The government should be a leader and set the bar for providing comprehensive climate-related financial disclosures.
  • Catalysing sustainable finance flows and markets: The government should make direct expenditures, without the expectation of commercial return, to spur activities earlier in the innovation process.
  • Position Australia as a global sustainability leader: Australia should position itself as a global leader by advancing multilateral cooperation and collaboration on regional decarbonisation.

CPD welcomed the publication of the Sustainable Finance Strategy consultation paper, acknowledging it as the culmination of many streams of work across Treasury and financial regulators, and representing a strong step towards positions Australia as a sustainable finance leader across the board.

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