Green Bond Framework
The Green Bond Framework sets out the Australian Government's key climate change and environmental priorities and outlines how green bonds finance Eligible Green Expenditures. This includes the basis for identifying, selecting, managing, and reporting on expenditures financed with green bonds.
The Framework has been developed in accordance with the International Capital Market Association (ICMA) Green Bond Principles 2021 and is informed by the Climate Bonds Initiative’s Taxonomy.
The Framework includes:
- Australia’s climate and environmental priorities
- The types of projects and expenditures eligible for financing through green bonds
- Processes for project evaluation and selection of eligible projects and expenditures
- How proceeds of green bond issuance will be managed
- Ongoing reporting arrangements for the allocation of proceeds and the impact of projects
- Details of the external review of the Framework and ongoing reporting.
Sustainalytics, an independent ESG and corporate governance research, ratings and analytics firm, provided a Second-Party Opinion on the Framework’s environmental credentials and confirmed that it is credible and impactful and aligns with the four core components of the Green Bond Principles 2021.
What Green Treasury Bonds will finance
Green Treasury Bond proceeds will be used to finance government programs that drive Australia’s net zero transition and deliver broader environmental benefits. Eligible Green Expenditures must align strongly with one or more of the Australian Government’s three key Green Goals:
- Climate change mitigation
- Climate change adaptation
- Improved environmental outcomes.
Some Eligible Green Expenditures that may be financed by Green Treasury Bonds can be found in the list of projects below.
What Green Treasury Bonds won’t finance
In recognition of the Government’s priorities and market expectations, projects in the following sectors are excluded from consideration as Eligible Green Expenditures:
- nuclear energy
- arms and ammunition manufacturing and chemical weapons
- manufacture, production or sale of alcohol, tobacco, and other recreational drugs
- manufacture or retail sale and distribution of any products and services that are prohibited by any commitments under an international convention or treaty instrument to which Australia is a signatory
- gambling
- development, refining and transportation of fossil fuels, as well as programs that predominately assist Australia’s highest greenhouse gas emitting facilities.
