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Global financial regulators advance on green taxonomies, with Australia piloting its newly released document with large banks and Caribbean governors partnering with IFC to produce a regional framework, and the TNFD consults on nature data best practices.
Australia releases sustainable finance taxonomy
Australia unveiled its new sustainable finance taxonomy in June. The document, developed after a 20-month consultation with input from government and industry, is now being piloted with a select cohort of financial institutions, including Rabobank, the Commonwealth Bank of Australia and Moody’s Ratings.
Published by the Australian Sustainable Finance Institute (ASFI), the taxonomy covers green and transition activities, including mining of key minerals like lithium and nickel, provided they meet specific emissions criteria. It also sets expectations for engagement with First Nations peoples and excludes fossil fuel extraction from eligibility.
The framework is voluntary and aims to strengthen investor confidence and reduce greenwashing risks while supporting capital allocation aligned with the Paris Agreement. “ASFI will continue to engage with regulators, public and private financial institutions and industry bodies to integrate the taxonomy into Australia’s broader financial and policy architecture,” said a statement announcing the taxonomy.
Caribbean governors and IFC launch joint green taxonomy project
In a landmark move, the Caribbean Community’s Committee of Central Bank Governors and the International Finance Corporation (IFC) are developing a regional green finance taxonomy aimed at unlocking climate investment across the English-speaking Caribbean.
The partnership will define clear guidelines for green assets, encouraging lending and investment in climate-resilient projects such as renewable energy and hurricane-proof infrastructure.
“This partnership with IFC represents a pivotal moment for the Caribbean’s financial resilience and climate adaptation efforts,” said Dr. Kevin Greenidge, governor of the Central Bank of Barbados. He added that the initiative will “help our financial institutions better assess and fund the green investments our economies desperately need to build back better and stronger after each climate shock”.
TNFD pilots nature data principles for global markets
The Taskforce on Nature-related Financial Disclosures has launched a pilot programme for its new nature data principles. The project aims to upgrade market access to high-quality nature data and will culminate in the release of a set of recommendations at Cop30 in November.
The pilot, involving over 40 upstream data providers and 20 downstream users, will run until October and test a set of principles for assessing data quality for reporting, target setting and transition planning.
“Access to the right nature data, in the right format and at the right time, is essential for businesses and financial institutions seeking to assess and manage their nature-related dependencies, impacts, risks, and opportunities,” said Yana Gevorgyan, secretariat director of the Group on Earth Observations.
Renewable energy transition key for African price and currency stability
At a high-profile side event at the recent Bonn climate conference, Power Shift Africa, a green energy thinktank, launched its African Energy Leadership report which outlines an economic strategy for 100% renewable energy across the continent.
The report says a full green energy transition could save the African continent up to US$5tn by 2050 with fuel cost savings of $8.3tn, which would exceed the $7.3tn investment required. Adopting the report’s policy roadmap “will mean countries are less vulnerable to currency fluctuations that come with dirty energy imports”, said Professor Sven Teske from the University of Technology Sydney who led the energy modeling team behind the technical analysis.
“Investing in renewable energy will not only replace fossil fuels but also end the indebtedness that holds us back through energy dependence. It’s the best option for our people,” said Mohamed Adow, Power Shift Africa’s director.
Research notes
Financing the Green Transition
This policy report – subtitled “Increasing bankability, phasing out carbon investments and funding ‘never bankable’ activities” – finds that the main barrier to financing the EU’s green transition is not capital scarcity, but the poor bankability of green projects. Produced by the International Center for Sustainable and Just Transformation at Witten/Herdecke University and the Institute for Ecological Economic Research, the report introduces a taxonomy classifying activities by sustainability and bankability.
It recommends targeted ECB green lending such as green TLTROs for bankable projects, stricter regulation to discourage high-emission investments, and substantial public funding for essential but unprofitable green activities like wetland conservation. It concludes that only a comprehensive policy mix – combining financial, fiscal, sectoral, and industrial measures – can close the financing gap.
Banks and Climate Litigation Risk
This Grantham Research Institute report examines the growing risks banks face from climate litigation, both directly and via their clients. An analysis of 20 ECB-supervised banks reveals progress alongside significant gaps in legal risk management. The report calls for targeted prudential interventions and clearer supervisory guidance, stressing that climate litigation is a driver of traditional risk categories.
Call for comments
- The European Supervisory Authorities (EBA, EIOPA, and ESMA) have opened a public consultation on their draft joint guidelines for integrating ESG risks into supervisory stress tests for banks and insurers. Stakeholders are invited to submit feedback by 19 September 2025.
- The UK government is consulting on the exposure drafts of the UK Sustainability Reporting Standards (UK SRS S1 and UK SRS S2), which are based on the International Sustainability Standards Board’s framework. The consultation is open until 17 September 2025.
This page was last updated July 3, 2025
Written by
Ike Walker, a Green Central Banking contributor since 2023, has a decade's experience in research writing. An Utrecht-based scholar, Ingrid specialises in transformative justice, green finance, law and systems change. They are an Utrecht University's Bright Minds scholar and previously worked for Cambridge University and various justice-based NGOs.
