Introduction

Australia’s financial system must address sustainability-related risks and opportunities to support a resilient, inclusive economy. Sustainable finance is key to meeting national challenges such as climate change, community resilience, economic inclusion, and First Nations economic self-determination. The evolving financial landscape and regulatory shifts necessitate sector-wide upskilling. This revised pilot Framework sets out core sustainable finance capabilities for different roles and proficiency levels across the finance sector. It is open for feedback for six months to refine future versions.

Definitions, aim and structure

Sustainability is defined as meeting current needs without compromising future generations. Sustainable finance integrates environmental and social impacts into financial decisions. The Framework outlines core capabilities and skills needed across three proficiency levels—Emerging, Intermediate, and Senior. It is intended to support role design, recruitment, professional development, and education, while aligning learning outcomes with industry needs. The Framework applies across social and environmental domains, recognising sustainability as multidimensional.

Updates to the framework

Key updates include: integrating ‘Transition Planning’ within the ‘Strategy’ pillar; embedding ‘First Nations and Finance’ considerations across all pillars; expanding sustainability issues beyond climate to include nature and social concerns; and clarifying what constitutes a ‘Sustainability Mindset’.

Audience and use

The primary audience is financial institutions, which are encouraged to align development plans with the Framework to standardise capabilities. Real economy entities, education providers, and individuals can also use it to guide role requirements and learning pathways. Adoption is expected to build a more capable workforce and pipeline of sustainable finance practitioners.

First Nations and finance

The Framework embeds First Nations perspectives across all competencies, promoting inclusion of Indigenous knowledge, values, and consultation practices. It highlights current challenges such as limited First Nations representation in finance and a lack of supporting resources. ASFI recognises the risk of ineffective engagement and recommends developing a dedicated capability framework specific to First Nations finance. Core focus areas include economic self-determination, Free, Prior and Informed Consent (FPIC), and integration of First Nations priorities in strategy and reporting.

The framework

The Framework includes five key capabilities: Sustainability Mindset, Sustainability Strategy, Sustainability Risk Management, Sustainable Finance Products, and Sustainability Reporting. Each is outlined with knowledge and skill requirements across proficiency levels.

Capability: Sustainability mindset

This cross-cutting capability includes systems thinking, future focus, ethical behaviour, inclusivity, urgency, collaboration, and innovation. Professionals are encouraged to value results, embrace ambiguity, and demonstrate perseverance and self-reflection to embed sustainability in decision-making.

Capability: Sustainability strategy

Professionals must understand transition plans, FPIC principles, and align sustainability actions with organisational goals. At advanced levels, individuals are expected to shape and oversee strategies that influence systemic change and foster partnerships, including with First Nations stakeholders.

Capability: Sustainability risk management

Risk management involves identifying and assessing climate, nature, and social risks. Practitioners should be able to conduct scenario analysis and materiality assessments, and develop appropriate governance responses. Advanced roles include influencing regulatory policy and ensuring integration of sustainability into enterprise risk processes.

Capability: Sustainable finance products

This focuses on integrating sustainability into financial offerings such as green bonds and sustainability-linked loans. Skills include product design, alignment with taxonomies, and performance monitoring. Senior professionals should lead product strategy, engage stakeholders, and develop innovative instruments aligned with sustainability outcomes.

Capability: Sustainability reporting

Reporting requires understanding global frameworks and ensuring disclosures are accurate and material. Capabilities include data analysis, impact measurement, and narrative construction. At senior levels, professionals must ensure compliance, governance, and strategic use of reporting to manage risks and inform decision-making.

Acknowledgements

ASFI acknowledges national and international contributors to the Framework, including experts from academia, finance, and industry who participated in interviews and consultations. The Framework aligns with similar models from Singapore and Ireland.