The Australian Sustainable Finance Institute (ASFI) has issued new guidance to support the real-world application of the country’s sustainable finance taxonomy in debt markets.
Released Monday, the voluntary guidance is meant to inform the issuance of use-of-proceeds debt instruments such as green or transition bonds. It was developed by representatives from the Australian Treasury, New Zealand Treasury, Australian Office of Financial Management and Australia’s sovereign and semi-sovereign debt managers.
Specifically, the guidance aims to clarify terminology, disclosure expectations and technical screening criteria so capital can be directed consistently toward activities that support climate change mitigation.
“Over the past 12 months, Australia has taken a significant step forward in sustainable finance. We’ve launched a taxonomy that reflects the structure of our economy — including technical screening criteria for hard-to-abate sectors like mining and agriculture — and tested its application with 11 of Australia’s largest financial institutions,” ASFI CEO Kristy Graham said in a release.
“That work has laid the foundation. The priority is now ensuring the taxonomy can be used with confidence in real-world financing, and building capability across the finance system so more capital can flow to sustainable activities.”
Australian sustainable debt issuance reached US$53.8 billion in 2025, representing an annual increase of 11% and “continued momentum” in this realm, despite “softer global conditions,” ASFI noted.
Nicole Yazbek-Martin, ASFI executive manager, said in the release that the guidance will help ensure that such debt instruments “are aligned with credible definitions of sustainability” moving forward.
It will be officially launched in Sydney at an event co-hosted by ASFI and Moody’s Ratings, which is a participant in the Australian taxonomy implementation pilot. Additional supporting taxonomy materials are slated to be released by the institute later this year.
As previously reported, Australia has “leapfrogged Canada” with its sustainable finance taxonomy, taking inspiration from the 2022 Taxonomy Roadmap Report produced by Canada’s Sustainable Finance Action Council, to launch its own taxonomy in June 2025.
However, the Canadian government has said it’s forging ahead with establishing a sustainable finance taxonomy. In December, it selected the Canadian Climate Institute to lead the development of the taxonomy, which will help investors, lenders and other stakeholders identify “green” and “transition” investments that are environmentally friendly and consistent with Canada’s goal of achieving net-zero emissions by 2050.