Bold plan to reshape Australia’s financial system

From

Jacki Johnson

Australia’s financial services sector has come together in an unprecedented coalition to promote a transformation of the country’s financial system to prioritise prosperity for all, meet 21st century sustainability challenges, and position Australia more competitively within international markets.

The Australian Sustainable Finance Initiative (ASFI) – comprising 80 organisations across major banks, insurers, super funds, civil society, and stakeholders – has today released its Roadmap that sets out a bold plan to align Australia’s financial system to support a thriving Australian society, a healthy environment and a strong and prosperous economy.

The Roadmap calls for 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.

The Roadmap makes 37 recommendations that will enable the financial services sector, together with regulators and governments, to strengthen Australia’s financial system with the aim of recovering from the impacts of COVID-19 and delivering a transition to a net zero, resource-efficient and inclusive 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.”

“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” said Johnson.

ASFI Co-chair Simon O’Connor, said “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” O’Connor added.

The Roadmap’s 37 recommendations are focused on:

  1. Embedding sustainability into leadership.
  2. Integrating sustainability into practice.
  3. Enabling resilience for all Australians.
  4. Building sustainable finance markets.

The Roadmap has been developed collaboratively by more than 140 participants from over 80 organisations spanning Australia’s financial system, including financial institutions, civil society, academia, regulators and government. This has been done under the guidance of a Steering Committee comprising major banks, insurers, investors, and civil society representatives supported by financial regulators, APRA and ASIC, in observer roles. Delivery of the roadmap will be driven by a permanent sustainable finance body, to be established in 2021.

Read the Australian Sustainable Finance Roadmap report.

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