The Australian Sustainable Finance Institute (ASFI) has released Australia’s first-ever Sustainable Finance Taxonomy, a landmark framework to define which economic activities can be considered sustainable or climate-aligned in Australia’s financial markets. Developed over three years with input from over 80 organizations across finance, industry, and civil society, the taxonomy initially covers activities essential for achieving Australia’s net-zero goals in key sectors such as electricity generation, manufacturing, buildings, and transport.

The taxonomy is designed to guide investors, companies, and policymakers by providing consistent criteria to identify green investments and reduce greenwashing risks. ASFI plans to expand it over time to include social and nature-related objectives. This milestone aligns Australia’s financial sector more closely with global sustainable finance standards, helping unlock capital for the transition to a low-carbon economy while ensuring transparency and integrity in sustainability claims.