The Responsible Investment Association Australasia (RIAA) has welcomed the Albanese government’s commitments to a sustainable finance agenda outlined in the 2023–24 budget.
In the budget on Tuesday, the government said that it intends to provide $14.2 million over four years from 2023–24 to support its sustainable finance agenda.
This will include establishing a sovereign green bond program, supporting the Australian Securities and Investments Commission’s (ASIC) work against greenwashing and funding the development of a sustainable finance taxonomy.
“RIAA welcomes a federal budget that has made positive first steps in supporting a comprehensive approach to sustainable finance,” said RIAA chief executive officer Simon O’Connor.
“From social impact investment to the critical frameworks that will underpin a shift of capital to support the low-carbon transition via a taxonomy, these steps mark important progress that recognises the role of finance in supporting a sustainable Australia.”
Specifically, the 2023–24 budget included:
- $8.3 million over four years from 2023–24 (and $1.3 million per year ongoing) to establish a sovereign green bond program to raise capital for environmental and climate change-related programs;
- $4.3 million in 2023–24 for the ASIC to ensure the integrity of sustainable finance markets by investigating and undertaking enforcement action against market participants engaging in greenwashing and other sustainable finance misconduct;
- $1.6 million in 2023–24 to support the initial development of a sustainable finance taxonomy for classifying economic activities according to their impact on sustainability goals.
“These commitments show we are back on the right track as a nation, building a comprehensive strategy that will ensure private finance aligns with public sector commitments to support this huge industrial transformation required over coming decades,” he added.
The RIAA expressed its support for the $214.1 million in funding towards the government’s Nature Positive Plan. Mr O’Connor said that investors were increasingly focused on nature risk, and were factoring environmental considerations into investment decision making.
“The government’s commitment to providing accessible environmental information should help reporting against the Taskforce on Nature-related Financial Disclosures (TNFD) framework, which will be key to delivering on the government’s Nature Positive Plan,” he said.
“Going forward, strong environmental laws will be essential to protecting Australia’s incredible biodiversity and providing investors with certainty.”
Other measures welcomed by the RIAA include funding for social impact investment and the establishment of an anti-slavery commissioner to help fight modern slavery.