The Australian Sustainable Finance Institute (ASFI), the peak body for Australia’s sustainable finance sector, has released a first of its kind guidance for issuance of taxonomy-aligned use-of-proceeds debt. Developed in collaboration with representatives from Australian Treasury, Australia’s sovereign and semi-sovereign debt managers, and New Zealand Treasury, the guidance provides a common approach to applying the Australian Sustainable Finance Taxonomy in debt markets.
The release marks the next phase of the Australian Sustainable Finance Taxonomy, shifting from framework development to practical application across the financial system. It is designed to support issuers, investors and reviewers to apply the taxonomy consistently, strengthening confidence in how capital is allocated to climate-aligned activities.
ASFI chief executive officer Kristy Graham said the guidance reflects a shift from framework development to real-world application.
“Over the past 12 months, Australia has taken a significant step forward in sustainable finance,” she said. “We’ve launched a taxonomy that reflects the structure of our economy – including technical screening criteria for hard-to-abate sectors like mining and agriculture – and tested its application with 11 of Australia’s largest financial institutions.
“That work has laid the foundation. The priority is now ensuring the taxonomy can be used with confidence in real-world financing, and building capability across the finance system so more capital can flow to sustainable activities.”
In Australia, use-of-proceeds instruments make up a significant share of sustainable finance activity. Despite softer global conditions, Australian sustainable debt issuance reached USD 53.8billion in 20251, an 11% increase year on year, highlighting continued momentum.
ASFI Executive Manager Nicole Yazbek-Martin, who led the development of the Sustainable Finance Taxonomy and has contributed to the development of global taxonomies, said this guidance is an important step toward consistent market application.
“This first of its kind guidance provides practical direction for issuers, investors and reviewers, bringing greater clarity and consistency to how the taxonomy is applied in debt markets,” she said.
“Use-of-proceeds instruments are a core part of Australian sustainable finance activity, and for the taxonomy to be effective it needs to be usable in financing structures. This guidance helps ensure those instruments are aligned with credible definitions of sustainability.”
Alongside the guidance, ASFI will release additional supporting materials later this year to support further market application of the taxonomy. This includes insights from the completion of the taxonomy implementation pilots undertaken with 11 financial institutions – ANZ, Bank of China, Commonwealth Bank of Australia, Clean Energy Finance Corporation (CEFC), HESTA, Metrics Credit Partners, Moody’s Ratings, NAB, Rabobank, Rest Super and Westpac.
Findings from the pilot will inform market practice and support broader adoption of the taxonomy, while also contributing to Government consideration of initial use cases within Australia’s financial and regulatory architecture, consistent with the Australian Government’s Sustainable Finance Roadmap.
[1] Westpac Sustainable Finance Market Update Q4 2025
