Speech at the Australian Sustainable Finance Institute Adaptation Finance Report Launch

I’d like to begin by acknowledging the Ngunnawal and Ngambri peoples and paying my respects to their Elders and all First Nations people present.

Friends, I am delighted to join you today for the launch of the Australian Sustainable Finance Institute's report Financing Australia's Resilience: Extending Australia's Taxonomy setting out why expanding Australia's Sustainable Finance Taxonomy to include climate adaptation and resilience is a low-cost, no-regrets, and high-value step forward in the critical endeavour of unlocking private capital for Australia's long-term resilience.

The taxonomy has already helped to build a common language for sustainable investment in Australia.

Expanding this work to include adaptation and resilience is a key next step as we acknowledge and prepare for the growing impacts of climate change by enabling investment in a more resilient economy.

I thank ASFI for its leadership and for its partnership with the Australian Government on this important work.

As Assistant Minister for Climate Change and Energy, I have had the opportunity to work closely with ASFI over the last few years, including through its parliamentary advocacy and at COP30 in Belém.

I acknowledge the leadership of CEO Kristy Graham, Nicole Yazbek-Martin and Purdie Bowden and the broader team of partners with ASFI who are driving this work forward. I also thank officials from my department, including Nicole Mitchell and her team, for their ongoing engagement and support.

ASFI’s initial work to broaden the Australian Sustainable Finance Taxonomy to encompass adaptation and resilience was a case of sensible, targeted effort.

It responds to a clear and sharpening need for credible, practical market architecture that can facilitate private investment to buttress a more resilient economy.

As I’m sure you all know, I join you today wearing two hats: both climate change and emergency management – it’s an intersection of responsibilities that says a lot about our circumstances and challenges in 2026.

Australians are already experiencing the impacts of acute climate events and chronic climate effects.

Every year, we get some combination of more frequent, more intense, wide-ranging bushfires and floods that damage homes, infrastructure and our environment.

Farms and communities face more severe weather events while coming to grips with longer-range adjustment to temperatures and rainfall.

Heatwaves and increased humidity are putting pressure on people’s health and reducing productivity.

And supply chains face new disruptions while insurance costs continue to rise.

It’s sobering to note that the National Climate Risk Assessment estimates the total economic cost of climate-related disasters at $38 billion per year, rising to $73 billion by 2060.

The question is: how do we finance the investments that can prevent or reduce these costs and make our communities safer and our economy more resilient?

Historically, much of the effort when it comes to disaster policy and programming has been focused on recovery.

To some degree that made sense in a world of relatively infrequent major hazard events.

It doesn’t make sense now.

And while of course our response and recovery capability is more critical than ever, we simply have to deliver focused, science-informed effort at the front end.

Whether we call it adaptation or risk-reduction and resilience, that enterprise is now essential.

It is the least-cost and least-harm approach – but we are as yet in the early stages of applying it to the extent necessary.

If done well, adaptation investments can deliver a triple dividend by:

• reducing damage and losses from future climate impacts
• while generating benefits today, and
• while creating broader economic, social and environmental benefits that sustain communities over the long term.

We all know that well-targeted adaptation investments can generate substantial returns, with benefit-cost ratios commonly ranging from around 2:1 to 10:1, depending on the measure and context.

But the scale of the challenge is simply too large for public funding alone.

And in any case, we need the kind of responsive, creative, and efficient outcomes that private investment can deliver.

That’s why we need to create the conditions in which private capital can recognise climate resilience as an investable opportunity.

And this is where the expansion of the Australian Taxonomy to adaptation and resilience stands to make a perspective-altering contribution.

Australia has already made significant progress in mobilising sustainable finance for decarbonisation and our net zero commitment – progress that is being supported by the Australian Taxonomy.

This voluntary framework has already created something the market needs: a common language for identifying sustainable economic activities.

But its focus is primarily on climate mitigation, even while we acknowledge that mitigation, through investment in the clean energy transition can help build resilient systems.

Certainly that’s the case with concessional finance delivered by the Clean Energy Finance Corporation as part of our government’s Rewiring the Nation program. And I would argue it’s the case with our work to lift the energy performance of Australia’s Build Environment

But attention is now increasingly turning to how financial markets can support adaptation and resilience directly.

And expanding the taxonomy to adaptation and resilience is a meaningful and logical next step, helping to define what counts as an investment in climate resilience, and establishing a common framework that supports investors to identify, compare, and ultimately demonstrate the impact of resilience investment.

Friends, the Australian Government has a leadership role to play in this work.

That’s why we’re providing the policy settings and early-stage support to enable resilience investment, including through reforms to sustainable finance in Australia.

These include mandatory financial disclosures to improve transparency on climate risks and to help investors direct capital towards resilient investments.

Our voluntary climate-related transition planning guidance is also important.

It helps identify physical climate risks, makes it easier to assess resilience and investment needs, and gives investors plain information about climate-related risks and responses.

These crucial reforms are part of Australia’s Sustainable Finance Strategy and Sustainable Finance Roadmap, two foundational blueprints for unlocking investment in Australia's net zero transition and in climate resilience.

The National Climate Risk Assessment that was delivered a year ago is another game-changing resource.

It provides not just the framework but the data and analytic capability for identifying the climate risks we face, with principles and priorities for building resilience to those risks set out in the National Adaptation Plan.

And let me again emphasise how grateful I am for the partnership between Australian Government and industry, through ASFI, that has delivered the Australian taxonomy

There is no doubt this will help direct capital towards projects that reduce risk, strengthen communities, and improve long-term economic resilience.

Friends, as some of us noted with some reluctance yesterday, ‘taxonomy’ may not be the catchiest word going around.

And any word that starts with the letters T. A. X. is off to a difficult start. But a taxonomy for adaptation finance is one piece of the puzzle for helping to mobilise investment that can reduce future climate-related losses and strengthen long-term economic resilience.

We need that.

Climate resilience is not a nice-to-have – it is the necessary condition for stability, sustainability, and shared wellbeing in the 21st century.

This taxonomy can play a role in shaping our financial architecture to help deliver that necessary foundation for a more resilient economy.

It can join-up risk identification with capital allocation by turning resilience from a reassuring but abstract objective into something we can define, assess, finance, and turn into manifest reality.

In doing so, it can help direct capital towards productive investments in Australia's future security and prosperity.

This preliminary report serves as a valuable signpost to that future, and I congratulate everyone involved in this work for your commitment and your effort as part of this vital shared endeavour.

Thank you.