Australia is set to issue its first sovereign green bond in mid-2024, as reported by the Australian Financial Review on April 21. Treasurer Jim Chalmers stated that this would allow major investors, such as superannuation funds and banks, to finance public projects that support Australia’s transition to net zero emissions. The federal government is also collaborating with the Australian Sustainable Finance Institute (ASFI) to develop a sustainable finance taxonomy, which will provide common standards and definitions for identifying sustainable assets and activities. The long absence of such a taxonomy in Australia has hindered investments in climate solutions, according to ASFI CEO Kristy Graham. In addition, the Australian Securities and Investments Commission will receive an additional AUD4.3m (USD2.8m) to crack down on greenwashing.

Australia ranks second in terms of carbon dioxide emissions per capita among G-20 countries. To catch up with other developed economies in a global transition to net-zero emissions, the country set its climate goals into law in 2022. The objectives include reducing greenhouse gas emissions by 43% from 2005 levels by 2030 and achieving net zero by 2050. The sovereign green bond plan will attract more green capital to Australia by enhancing transparency around climate outcomes and increasing green investment opportunities, according to Treasurer Chalmers. Moreover, the program will enable investors to support public projects that drive Australia’s net zero transformation, thus enhancing the credibility and scale of the country’s green finance market, Chalmers added.

Sources:

https://www.afr.com/markets/debt-markets/australia-to-launch-sovereign-green-bond-next-year-20230421-p5d2bq

https://www.esgtoday.com/australia-to-issue-inaugural-green-bond/

https://www.businesstimes.com.sg/esg/australia-plans-green-bond-2024-climate-finance-reversal