The banking and insurance industries are critical to the successful decarbonization of the Australian economy. Important to this is directing financing and insurance to activities and projects that support the transition to a net-zero economy and are “green” in terms of being truly environmentally sustainable. In 2021, total sustainable debt issuance reached a record high of approximately US$960 billion, according to preliminary estimates from the Environmental Finance Bond Database. This figure includes green, social, and sustainability-linked bonds and represents a 61% increase in just one year.

Continued growth is expected in 2022 as companies and governments seek to finance the transition. A key challenge will be managing this growth in a way that preserves the legitimacy of these financing instruments and combats concerns about greenwashing. To discuss important issues with respect to greenwashing in Australia, S&P Global Sustainable1 hosted a roundtable in March, inviting a number of key contributors to the sustainable solution in Australia to participate.

Key takeaways from the roundtable discussion:

• Australia needs its own taxonomy.
• Regulators indicated increased focus on greenwashing. 
• Banks raise efforts to ensure products are green.
• Science-based approaches provide needed credibility and consistency. 
• The need to build resilience can't be ignored. 
• Fossil fuel companies are rightly provided an opportunity to green their businesses.
• Data challenges highlight the need for standardization and transparency to unlock capital and see rapid progress.
• It's time to move forward.