A number of superannuation funds, investment managers, banks and insurers have set out a road map, calling for players in the finance sector to support the transition of the economy towards net-zero emissions among other reforms.
The Australian Sustainable Finance Initiative (ASFI), which comprises 80 organisations including major banks, insurers, super funds and other stakeholders, released its road map on Tuesday, calling financial system participants to embed sustainability into their company policies.
The road map has made 37 recommendations aiming to enable the sector, along with regulators and governments to boost Australia’s financial system in its recovery from COVID and to deliver a transition to a net-zero economy.
The road map has focused on embedding sustainability into company leadership and practice, as well as building sustainable finance markets.
It was worked on by more than 140 participants from organisations spanning financial institutions, academia, regulators and government.
APRA and ASIC had appointed civil society representatives to the ASFI steering committee, who sat alongside a number of banks, insurers and investors.
ASFI co-chair Jacki Johnson said the road map has signified a change in how the industry does business.
“It provides a path towards a financial system that is better prepared to face future risks and shocks, such as a changing climate; to meet the current needs of Australians while delivering on long-term needs for a sustainable future; to enhance financial inclusion and well-being of all Australians, including our most vulnerable; and to direct capital to where it is most needed,” Ms Johnson said.
“Many of the challenges that Australia faces are global in nature and beyond our borders, a major international shift is underway shaping capital flows. There is an urgent imperative for Australia’s financial services sector to act to remain globally competitive in a world increasingly prioritising a sustainable economy.”
She added the collective is looking to reorient capital, where it is lent, insured and invested.
ASFI co-chair Simon O'Connor added the road map is the financial services sector’s contribution to making sure the sector is aligned with the future.
“The financial services sector recognises the ciritcal role it needs to play for Australia to recover from the pandemic and to prepare for our future challenges,” Mr O'Connor said.
Delivery of the road map will be driven by a permanent sustainable finance body, to be established next year.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].