Council of Financial Regulators Climate Change Activity Stocktake Paper 2023

Summary:

The Council of Financial Regulators Climate Working Group published its 2023 Stocktake paper, outlining recent activities and planned work related to climate change risks and opportunities for Australia's financial system. The Working Group coordinates efforts between Australian financial system regulators to enhance the ability of financial market participants to manage climate-related risks and identify opportunities. Key priorities include:

1. Improving understanding of climate change impact: The Working Group is continuing to analyze the impact of climate change on the Australian economy and financial system through various studies and modeling activities.
2. Enhancing transparency and consistency of sustainability-related information: The group is working to strengthen the foundations for high-quality and comparable climate-related financial disclosure, with Treasury set to release a detailed design proposal for mandatory climate disclosure requirements.
3. Developing an Australian Sustainable Finance Taxonomy: The Working Group is supporting the development of a sustainable finance taxonomy for Australia, which will provide common standards and definitions for sustainability characteristics of investments.
4. Continuing international engagement on sustainable finance: The group is actively involved in international developments, including the Network for Greening the Financial System, Financial Stability Board, and G20 Sustainable Finance Working Group.

The Working Group's priorities align with the Government's upcoming Sustainable Finance Strategy, which aims to improve transparency, deepen Australia's green finance markets, and take up sustainable finance opportunities.