The leaders and senior executives of Australia’s major banks, superannuation funds, insurance companies, financial sector peak bodies, civil society and academia are coming together to form the Australian Sustainable Finance Initiative (ASFI). The ASFI will set out a roadmap for realigning the finance sector to support greater social, environmental and economic outcomes for the country.
The ASFI is modelled on international best practice, including the European Union’s High-Level Expert Group on Sustainable Finance and the UK’s Green Finance Taskforce. It will be guided by a Steering Committee charged with developing a set of recommendations to enable the finance sector to contribute more systematically to the transition to a more resilient and sustainable economy.
The ASFI Steering Committee is tasked to deliver a Roadmap in 2020 with recommendations that will assist the financial services sector to:
1. Mobilise capital to deliver on national and global sustainable development and climate goals;
2. Enhance the sustainability, resilience and stability of the financial system by embedding sustainability, climate and human rights considerations into financial markets and products;
3. Ensure better informed financial decision making by enhancing disclosures and transparency on environmental, social and governance risks and opportunities; and
4. Deliver a financial system that meets community expectations around sustainability.
“The roadmap we create will include pathways, policy signals and frameworks that will better enable the financial services sector to contribute to delivering on international commitments, such as the Paris Agreement on Climate Change and the UN Sustainable Development Goals, while underpinning economic stability and prosperity for Australia.” said Jacki Johnson, IAG Group Executive and co-Chair of the Initiative.
“Issues such as climate change and human rights have become material to business and the financial services community. Climate change was recently described by the Deputy Governor of the Reserve Bank of Australia as a systemic risk to the stability of our economy, and APRA emphasised last week that climate risks are material, foreseeable and actionable now.”, said Simon Connor, Initiative Co-Chair and CEO of the Responsible Investment Association Australasia (RIAA).
“The financial services sector is both exposed to those risks, as well as having an essential role in funding and underwriting a future Australia, providing the capital necessary to deliver on sustainable development and climate-related commitments. Through a greater alignment between the financial services sector and these sustainability goals, the sector can both deliver for Australians while building a better, more stable and sustainable financial system. This unique and high-level collaboration will set out a roadmap for achieving this goal and shows the willingness of the financial services sector to step up and play an active role in building a more sustainable and resilient economy for all Australians” Mr Connor added.