- Posted on 5 Jun 2025
- 5 min read
Building climate skills and competencies for Australia's financial system.
The scale of finance required to transition to a low carbon economy, both in Australia and globally, goes well beyond what the public purse is able to fund. Private sector finance is essential to achieving domestic and global climate goals.
Increasingly there is an understanding that transitioning to net zero emissions, whilst also building climate resilience, requires a global workforce with climate-related skills and capabilities across a wide range of organisational functions and across all sectors of the economy.
UTS Institute for Sustainable Futures (ISF) Research Directors Alison Atherton and Gordon Noble explore a potential mechanism to build systems and processes for finance institutions to assess their climate capabilities – capability maturity models.
Capability Maturity Models were originally developed to assess the capabilities of software developers at a time when that sector was rapidly evolving.
Capability Maturity Models have since been proposed for a range of other purposes. A particular area of relevance for financial institutions is the use of capability maturity models to address risks of cyber hacking. Responding to rising cyber-attacks, the US Department of Energy developed the Cybersecurity Capability Maturity Model in 2012.
ISF makes the case for the development of a Climate Capability Maturity Model as an essential component of managing climate related financial risk across Australia’s financial system.
From the perspective of climate skills three illustrative domains are identified for consideration in a Climate Capability Maturity Model for Australia’s financial system:
- Strategy
- Skills Mapping and Analysis
- Continuing Professional Development
Domain 1: Strategy
A financial institution should have a strategy to build and retain climate skills across the organisation including board, senior management and employees, that aligns with the organisation’s climate objectives, including achievement of climate targets. The strategy should include remuneration aligned with skills levels and achievement of climate objectives.
Domain 2: Skills Mapping and Analysis
A financial institution should regularly map its existing climate skills and analyse future needs to align with the organisation’s climate objectives, including climate targets. To support addressing system wide climate skills gaps, a financial institution should disclose to financial system regulators areas where skills gaps are pronounced.
Domain 3: Continuing Professional Development
A financial institution should support employees to build and refresh climate skills through Continuing Professional Development programs.
It is likely that the components of a Climate Capability Maturity Model, including climate capability practices and domains, will vary according to the functions of financial institutions. Developing a set of domains would provide a harmonised framework that would have the flexibility to capture the different practices across Australia’s financial system.
To develop a Climate Capability Maturity Model for Australia’s financial system there is a need to establish a collaborative process between financial institutions, financial regulators and universities. A Delphi Method process, through which a group of finance professionals iterate on a model to ensure that it reflects the needs of financial institutions and has practical uses, is proposed.
Research outputs
download Developing a Climate Capability Maturity Model for Australia’s Financial System
Research Directors
Research Director, UTS Institute for Sustainable Futures
Research Director, UTS Institute for Sustainable Futures
Webpage
How research into simple home upgrades transformed lives, cut energy bills and reshaped government policy.
Webpage
Does Africa have enough renewable energy for an economic boom?
Webpage
Taking a precinct-wide approach to sustainability was key to achieving the ambitious vision for Central Park.
Webpage
For the past two years, UTS has partnered with SXSW Sydney to support their global event, finding common ground in their shared commitment to creativity, innovation and technology.
Webpage
How research into simple home upgrades transformed lives, cut energy bills and reshaped government policy.
Webpage
Does Africa have enough renewable energy for an economic boom?
Webpage
Taking a precinct-wide approach to sustainability was key to achieving the ambitious vision for Central Park.
Webpage
For the past two years, UTS has partnered with SXSW Sydney to support their global event, finding common ground in their shared commitment to creativity, innovation and technology.