The Australian Sustainable Finance Initiative (ASFI) announced today the unveiling of its new Roadmap aimed at transforming the country’s financial system in order to meet rising sustainability challenges and thrive in a transforming global economy.
ASFI Co-chair Jacki Johnson said:
“The Roadmap signifies a step change in how the finance sector 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.”
According to the coalition of 80 major banks, insurers, super funds, civil society, and stakeholders, the new Australian Sustainable Finance Roadmap calls on financial system participants to embed sustainability into their organisation’s purpose, strategy and leadership, and to support the transition of the economy to net zero emissions by 2050, consistent with international conventions including the Paris Agreement and the UN Sustainable Development Goals (SDGs).
The Roadmap includes a series of 37 recommendations for financial services companies, focused on four key areas:
- Embedding sustainability into leadership. Recommendations include establishing top-down accountability for sustainability, and aligning remuneration with sustainable long-term value creation including sustainability targets.
- Integrating sustainability into practice. Recommendations include developing TCFD reporting guidance, embedding sustainability into outsourcing and procurement, and mandating sustainability reporting.
- Enabling resilience for all Australians. Recommendations include enabling financial decisions based on sustainability preferences and supporting establishment of community finance.
- Building sustainable finance markets. Recommendations include establishing targets and trajectories to support net-zero aligned decisions, and supporting the development of a sustainable capital market.
Additionally, the Roadmap includes an action plan, outlining which financial market participants are best placed to lead or enable implementation of these recommendations, along with recommended timeframes within which implementation should be completed.
“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.
“We are seeking to re-orient capital – where capital is lent, what it insures and where it is invested – to supporting and building value today while strengthening the economic, natural and social assets that underpin our long term prosperity.”
ASFI Co-chair Simon O’Connor, added:
“As governments across Australia – federal, state and local – set a direction for a stronger and more sustainable nation, this Roadmap is the financial services sector’s contribution to ensuring our sector is aligned with this future. As an industry, we are ready to lead and play our part.
“Recent events, such as bushfires, floods and drought, as well as COVID-19, have highlighted how locally and globally connected our economy, society and environment are.
“The financial services sector recognises the critical role it needs to play for Australia to recover from the pandemic and to prepare for our future challenges. We need to mobilise now to enable a prosperous and thriving economy, which can only be delivered while investing in a sustainable and resilient society, and healthy environment.”