The Australian Sustainable Finance Institute (ASFI) has released a new report. The report recommends using a new classification structure to direct capital toward sustainable activities while facilitating a seamless transition to a sustainable economy and addressing the risk of greenwashing.
AFSI’s recommendations coincide with recent reports flagging the difficulties experienced by companies taking steps to become more sustainable when adopting global Task Force on Climate-related Financial Disclosures (TCFD) reporting requirements.
The report recommends that mandatory application of its taxonomy to financing should be phased in over time, and its application will depend on the claims made by the financial institution about its sustainability credentials. Demonstrating alignment will be voluntary if they do not attempt to make such claims.
Furthermore, ASFI intends to recommend categorizing disclosed activities based on their alignment with the taxonomy, which is expected to be completed in 2025.
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