Super Funds Get Taxonomy Boost Thanks to Government Backing for Sustainable Finance

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Australian superannuation funds have welcomed the government’s move to a ‘taxonomy’ of finance, saying it will help them better allocate their investments in line with responsible investment principles.

The Australian government recently announced its endorsement of the framework proposed by the Australian Sustainable Finance Initiative Australia (ASFI). It aims to provide clarity and certainty around using environmental, social and governance (ESG) criteria when making investment decisions.

“The new taxonomy will provide a consistent approach to classifying investments based on their positive and negative ESG impacts, allowing investors to make informed choices about where their money goes. It is hoped that this will result in increased transparency for superannuation funds and greater alignment with the interests of members and investors,” said Kristy Graham, the Chair of ASFI.

“We’re delighted that the Australian government has taken this important step towards driving sustainability in investing. We believe it will help funds better understand their investments, assess risk and identify opportunities for positive impact,” Graham added.

The Australian government’s backing for the taxonomy is seen as a massive win for responsible investment in Australia, with many key industry players praising the initiative. Superannuation funds have welcomed the move, saying it will allow them to understand their assets better and ensure they are appropriately aligned with their members’ interests.

“The new taxonomy provides an excellent foundation for superannuation funds to assess and report on the sustainability of investments and ultimately make better decisions on where to allocate funds,” said Paul Watson, Hostplus Superannuation team leader.

With greater clarity around responsible investment criteria, the Australian government has taken a giant step forward in promoting sustainable finance. Superannuation funds will now have access to better information and can confidently make investment decisions that are both financially viable and consistent with their members’ values.

The ASFI initiative is just one example of how Australia leads responsible investing. We look forward to seeing further development of the taxonomy and its implementation in investment strategies throughout the superannuation industry.

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