Australia will launch a benchmark sovereign green bond in the middle of 2024 to fund public projects as part of the government’s drive to attract investor capital to fund the country’s net-zero energy transition.
Minister of Financial Services Stephen Jones made this announcement in the opening session at the annual ACSI conference in Sydney on Wednesday.
“We are introducing a sovereign green program to enable investors to back public projects to drive our net-zero transformation,” he said in a room packed with Australia’s largest asset owners who manage a significant portion of the country’s $3.4 trillion of pension pool savings.
The bond program will boost the scale and credibility of Australia’s green finance market, he said. “We want to put out the biggest possible lever to attract more green capital to Australia and to our transformation projects.”
The Australian Office of Financial Management will engage with investors on the program ahead of first issuance in mid-2024.
The government will also co-fund the initial phase of the sustainable finance taxonomy currently being undertaken by the Australian Sustainable Finance Institute.
Jones explained the taxonomy will provide a common and agreed standard and definitions about the sustainable characteristics of different investments which is key to giving investors confidence to allocate capital to assets.
“Capital markets can’t work effectively unless there is transparent and credible information,” he said.
“The Australian Sustainable Finance Institute describes the taxonomy as a foundation piece of the sustainable finance architecture [and] the government agrees.”
He also warned Australia may be left behind in the global competition for investment dollars with Europe, Singapore and other more matured markets paving the way.
“We have some catching up to do in Europe, Singapore and other leading markets began this process a long time ago. But we are putting out shoulder to the wheel,” he said.