Australian sustainable finance taxonomy methodology report

The report outlines a methodology to distinguish between green, transition, and phase-down activities to mobilise private capital for Australia's net zero goals. It defines 'green' activities as consistent with Paris Agreement goals and 'transition' activities as those with a continued role in a net zero economy that lack low-carbon alternatives. The methodology recommends using internationally recognised 1.5°C aligned climate-science scenarios, specifically from the IEA and Climateworks, to objectively determine eligibility and avoid greenwashing and carbon lock-in.

• The Taxonomy Technical Expert Group (TTEG) defines 'green' activities as those consistent with achieving net zero greenhouse gas emissions in accordance with the Paris Agreement temperature goal.
• The report distinguishes 'phase down' activities from 'transition' activities; phase down activities are those inconsistent with a net zero future, have available low-carbon alternatives, and have no pathway to decarbonise without being phased out, such as internal combustion engine passenger vehicles.
• To ensure objectivity and avoid subjectivity associated with 'risk' language, the TTEG recommends using internationally recognised, credible 1.5°C aligned climate science scenarios to identify eligible activities, specifically citing the IEA Net Zero Emissions (NZE) and Climateworks scenarios.
• The taxonomy will focus on six priority sectors: electricity generation and supply (energy), minerals, mining and metals, construction and the built environment, manufacturing/industry, transport, and agriculture.
• The methodology incorporates a 'sunset date' principle, asserting that activities cannot remain in the transition category indefinitely and must follow a predetermined pathway to become 1.5°C aligned.

APA

Climate Bonds Initiative (2023). Australian sustainable finance taxonomy methodology report. https://www.climatebonds.net/files/documents/Transition-Methodologyfinal.pdf

Chicago

Climate Bonds Initiative. Australian sustainable finance taxonomy methodology report. 2023. https://www.climatebonds.net/files/documents/Transition-Methodologyfinal.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Australian sustainable finance taxonomy methodology report |date=December 2023 |url=https://www.climatebonds.net/files/documents/Transition-Methodologyfinal.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2023australian, author = {{Climate Bonds Initiative}}, title = {{Australian sustainable finance taxonomy methodology report}}, institution = {Climate Bonds Initiative}, year = {2023}, month = dec, url = {https://www.climatebonds.net/files/documents/Transition-Methodologyfinal.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }