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New government policies target greenwashing

12 December 2022 at 5:37 pm
Ruby Kraner-Tucci
A raft of new policies aimed at increasing transparency and accountability will be rolled out by the federal government.

Ruby Kraner-Tucci | 12 December 2022 at 5:37 pm


New government policies target greenwashing
12 December 2022 at 5:37 pm

A raft of new policies aimed at increasing transparency and accountability will be rolled out by the federal government.

A new comprehensive sustainable finance strategy and climate risk disclosure framework will be developed by the federal government in an effort to improve transparency and accountability.

The new sustainable finance strategy will include standards for sustainable investments, initiatives to reduce greenwashing and strengthen ESG labelling, and encourage more ambitious participation in international forums to support climate and sustainable finance.

The Council of Financial Regulators, which includes the Australian Prudential Regulation Authority (APRA), Australian Securities and Investments Commission (ASIC) and Reserve Bank of Australia (RBA) will support the Treasury to develop the strategy, which will be considered by the government early next year before public consultation.

See more: Greenwashing crackdown continues

Treasurer Jim Chalmers said in a speech made today that the sustainable finance strategy was “ambitious and coordinated”.

“This is something industry and investors have called for. It’s something our global counterparts and competitors are already doing. And it’s something that’s long overdue for an economy and financial sector like ours, with such a large stake in a successful transition,” said Chalmers.

I want our work here to be tailored, targeted, and practical – taking the best insights and lessons from global experience, and advancing Australia’s agenda in a strategic way.

“Given how critical a proper taxonomy is to a credible sustainable finance agenda – to help investors align with climate targets, to attract capital that supports the transition, to support regulators tackling greenwashing – it’s so important that we develop our own.”

See more: Australia takes steps towards sustainable finance framework

In addition to the strategy, the government also announced the development of a climate risk disclosure framework, which will mandate reporting requirements for large businesses and align Australian practices with other countries.

The framework, which is open for public consultation until 17 February 2023, is expected to take a phased approach and be tailored to comparable public sector corporate entities and investment funds.

See more: Increased investor confidence in clean energy

“As more countries move towards global best practice, and as investors demand higher-quality disclosures, it’s important that Australia now establish a framework for consistent, credible, internationally-comparable disclosures,” read a joint statement from Chalmers as well as climate change and energy minister Chris Bowen and assistant treasurer and financial services minister Stephen Jones. 

“This internationally-aligned framework will provide business and investors with the clarity and certainty they need to manage climate risks and invest in new opportunities.

“It will ensure large business and financial institutions are providing more information and greater transparency on how they are responding to climate change and supporting the transition to net zero.”

See more: Australia ranks ‘very low’ on climate action performance

CEO of the Responsible Investment Association Australasia, Simon O’Connor, said the work to build a national sustainable finance taxonomy “is an important signal” but warned it needed to factor in key environmental considerations.

“By reaffirming its commitment to mandatory corporate climate risk reporting, the government is supporting investors to make better decisions, to be able to compare apples with apples,” said O’Connor. 

“These climate disclosure standards must be clear and robust, to ensure investors can distinguish corporates with real commitment and outcomes from the illusion of tangible change. 

“There should be scope to grow this reporting regime to broader sustainability performance – important areas such as upholding First Nations Peoples’ rights and protecting and restoring biodiversity. These matters are also front of mind for investors and are also shaping decisions on where they deploy their capital.”

The Australian Institute of Company Directors’ CEO Mark Rigotti welcomed the announcement on behalf of the director community, which he said had been awaiting policy certainty on climate reporting.

“Today’s announcement takes us one step closer to standardised, internationally-aligned climate reporting requirements for Australian organisations, providing much needed clarity for directors, companies, investors and the broader stakeholder community,” said Rigotti.

“We recommend any mandatory requirements allow for a reasonable transition timeframe to accommodate the skills and capability uplift required. A balance needs to be struck between not rushing implementation, while recognising the importance of what is at stake.

“Directors and companies do have legitimate concerns around making the kinds of disclosures expected by the market under current legal settings. We need to make sure that policy settings encourage high quality reporting, rather than bare bones disclosures that do little to aid investment decision-making.”

The policies will further boost the federal government’s climate focus, which includes the delivery of a budget prioritising climate change protection and preparedness as well as legalising emissions reduction targets of 43 per cent by 2030 and net zero by 2050.

Ruby Kraner-Tucci  |  @ProBonoNews

Ruby Kraner-Tucci is a journalist, with a special interest in culture, community and social affairs. Reach her at


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