Unlocking Australia’s sustainable finance potential

Posted on 12 Mar 2021
Updated on 12 Mar 2021
2-minute read

Applying the EU’s Action Plan on Sustainable Finance to an Australian context to guide greening the economy.

Global financial markets are gaining momentum on developing financial systems aligned to deliver climate and sustainability objectives. Many countries have committed to, or are already in the process of creating and coordinating the implementation of road maps and action plans for a sustainable financial system.

Developing new green infrastructure presents an estimated $100 trillion investment opportunity over the next 15 years to meet the Paris Agreement on Climate Change, and to mitigate risks posed to extant portfolios. The Paris agreement requires nations to take action to limit their greenhouse-gas emissions and prevent global temperatures from rising 2 degrees Celsius above pre-industrial levels. The European Union (EU) sought first mover advantage to obtain these goals by requesting advice from a High Level Expert Group (HLEG), comprised of 20 industry experts. The HLEG considered how to enable coordinated action, mechanisms to steer capital towards sustainable investments and protect the financial system from environmental risks.

The HLEG released its final report in January 2018 and its recommendations now form the basis of the EU’s Action Plan on Sustainable Finance adopted by the European Commission (EC) in March 2018. This report reviews the EU Action Plan, comparing each of its 10 action points to the current state of play in Australia.