The Australian Competition and Consumer Commission (ACCC) is proposing to let the Australian Sustainable Finance Institute (ASFI) and industry participants collaborate on sustainable finance initiatives for five years.

The ASFI has sought authorization for itself, its members, and other industry participants to be able to exchange information to enhance integration of natural capital data into financial decision-making, for co-designing investment structures, and for regulatory reform proposals.

A separate authorization is intended to encourage collaborations in building efficient and sustainable investment structures and product features.

ASFI’s goal is to increase the flow of private capital into sustainable investment opportunities by:

• fostering development of sustainable farming practices;
• supporting producers to meet the sustainability regulations of export destinations; and
• contributing to emissions reduction targets.

“We consider that the proposed collaborative conduct would increase the likelihood of greater investment in projects seeking to preserve Australia’s environment as well as cost savings and process efficiencies,” said ACCC Deputy Chair Mick Keogh.

“With the proposed conditions, we are satisfied that the collaborative conduct is likely to result in public benefits that would outweigh any likely harm to competition.”

Mick Keogh, Deputy Chair, ACCC

The ACCC also states that this kind of collaboration and sharing information between competitors can “reduce competition in the supply of sustainable financial products as well as in broader financial markets through coordinated behaviour enabled by information sharing between competitors.”

The ACCC has drafted a proposal to grant ASFI authorization with conditions, and has listed several proposed conditions to restrain any negative impact. It also seeks to make sure that there is proper oversight and transparency of the arrangements, which includes suitably limiting how and what information is shared.

“With the proposed conditions, we are satisfied that the collaborative conduct is likely to result in public benefits that would outweigh any likely harm to competition,” Keogh added.

Feedback on the draft can be submitted until May 2. The ACCC will then make its final determination of the proposal.

The ACCC also earlier granted interim authorization to the ASFI and its members in March, which now allows the member banks to discuss and share information connected to developing potential banking capital requirement reforms to eliminate constraints on sustainable finance and investments in the country.