The Australian Banking Association (ABA) today welcomed a major government initiative to propel Australia's green economy and establish the nation as a green energy powerhouse.
The Federal Government today announced two substantial initiatives; the release of a consultation paper on the development of an Australian climate risk disclosure framework and, the development of a comprehensive sustainable finance strategy to be consulted on in 2023.
ABA Chief Executive Officer Anna Bligh said the initiatives are long overdue and will provide banks and business with the certainty they need to manage their climate risks and to grasp the opportunities from the new green industrial revolution.
"Government and industry now have the opportunity to genuinely work together to drive Australia's economic shift to a low carbon future."
ABA CEO Anna Bligh
"Government and industry now have the opportunity to genuinely work together to drive Australia's economic shift to a low carbon future," Ms Bligh said.
"We welcome the consultation on the ISSB's climate risk disclosure framework. Australian banks have led the way in climate disclosures as adopters of the Task Force on Climate-related Financial Disclosures (TCFD). We support clear, globally consistent, transparent reporting of climate financial risks."
"The consultation paper is a critical step towards establishing comprehensive sustainability reporting, in line with international standards."
"This initiative will show the world that Australia is not just committed to sustainability but is taking decisive action as we strive towards a net zero economy by 2050," she said.
The government has also committed to develop a comprehensive sustainable finance strategy in consultation with stakeholders and a government-led Australian taxonomy as the centrepiece of that strategy.
To achieve its climate targets, Australia will need Australian banks and other financial institutions to direct funding into the new projects and assets that the transition will require. An Australian taxonomy will create a common classification system to define investments that qualify as sustainable.
"These steps are critical pieces of the architecture we need to transition Australia to a low carbon economy."
We support the government playing a leading role in the creation of a taxonomy. The taxonomy will drive a lot of our funding and financing decisions. It will provide clarity on whether economic activity is aligned to Australia's net zero targets. It will also provide impetus for new banking products and services to all bank customer segments including retail, commercial and institutional because it will minimise risks of greenwashing. If an activity is classified as "green" then banks can legitimately provide green finance to customers," Ms Bligh said.
"These steps are critical pieces of the architecture we need to transition Australia to a low carbon economy."
Australian banks are already supporting a balanced and orderly transition to a low carbon future and have set individual financing or funding goals collectively worth over $200 billion between 2025 and 2030.
"Today's commitments from the Government will provide the clarity and certainty needed for those funds to be directed towards economic activity that will make the most impact."
