The government of Australia will issue its first ever green bond next year, joining the growing ranks of sovereign debt issuers participating in the sustainable finance market to help fund their environmental sustainability initiatives, according to an announcement on Friday by Treasurer Jim Chalmers.
The plans for the upcoming green bond offering was made at the Albanese Government’s second Investor Roundtable, hosted by Chalmers and convening investors representing more than $2 trillion in assets, focused on facilitating investment to help achieve Australia’s net zero goals, supporting the growth of sustainable finance, and financing energy performance upgrades for consumers.
According to a statement by Chalmers, Minister for Climate Change and Energy Chris Bowen, and Assistant Minister for Climate Change and Energy Jenny McAllister following the roundtable, the new green bond program will help enable investors to back public net zero-focused projects, attract more green capital to Australia, and help boost the scale and credibility of the country’s green finance market.
The statement added that the green bond program is expected to begin in mid-2024, following the development of a Green Bond Framework.
In addition to the new green bond initiative, the government outlined a number of commitments aimed at advancing the development of a sustainable finance market, including backing the development of a sustainable finance taxonomy and efforts to tackle greenwashing.
In November 2020, industry body the Australian Sustainable Finance Institute (ASFI) released its Australian Sustainable Finance Roadmap outlining a series of recommendations and actions to align the financial system with the net zero transition. One of the key priorities was the development of a taxonomy to define activities and assets as sustainable for the labelling of green financial products. In its statement, the government announced that it will co-fund the initial development phase of the taxonomy in partnership with ASFI.
The government also stated that it will provide more than $4 million in funding to regulator the Australian Securities & Investments Commission (ASIC) to expand its surveillance and enforcement functions to crack down on greenwashing. ASIC warned investment fund and financial product providers last year that it was on the lookout for misleading sustainability claims, and in February 2023, the regulator launched its first greenwashing-related court action against Marsh McLennan company Mercer Superannuation.
Australia set its climate goals into law last year, including its targets to reduce greenhouse gas emissions by 43% by 2030, compared to 2005 levels, and to achieve net zero by 2050.