Strong Activity Overlap Underpins Interoperability Between Australian and EU Sustainable Finance Taxonomies, New Report Finds

Sydney (October 19, 2026) — ISS STOXX Sustainability, the sustainable investment arm of ISS STOXX, today announced the publication of a new report titled Towards Cross-Taxonomy Alignment: Insights from Examining Interoperability between the Australian and EU Sustainable Finance Frameworks, developed in partnership with the Australian Sustainable Finance Institute (ASFI).

The findings indicate that existing EU Taxonomy data can help companies and investors assess alignment with the Australian Taxonomy, reducing duplication of effort when assessing alignment across multiple taxonomies. However, despite a high degree of interoperability, differences in activity coverage, technical criteria, and the treatment of environmental and social safeguards may require additional assessment when applying data across the two frameworks.

As sustainable finance taxonomies have developed across jurisdictions, differences in their design and application can complicate cross-market alignment assessments for companies and investors. The report explores the extent to which existing EU Taxonomy data can be leveraged to support assessments under the Australian Sustainable Finance Taxonomy, examining interoperability at the activity, company, and portfolio levels.

“Sustainable finance taxonomies are developing across jurisdictions, yet differences between frameworks can create complexity for investors assessing alignment across markets,” said Julia Leske, Head of Sustainability Business, APAC, at ISS STOXX. “This analysis highlights how existing EU Taxonomy data can support assessments under the Australian Taxonomy, while helping investors understand where differences between the frameworks require further consideration.”

Key findings from the report include:

• Substantial overlap between the Australian and EU taxonomies provides a foundation for interoperability: Of the 61 Australian Taxonomy green and transition activities relevant for Climate Change Mitigation, 52 activities (85 percent) have at least one comparable EU Taxonomy activity. This level of overlap creates an opportunity to leverage existing EU Taxonomy data to support Australian Taxonomy alignment assessments.
• More than half of Australian Taxonomy activities have strong-to-exact EU Taxonomy proxies: Of the Australian Taxonomy activities assessed, more than half (52 percent) have strong-to-exact EU Taxonomy activity proxies, comprising 35 percent classified as Strong and 17 percent as Exact. This degree of correspondence can reduce the need for investors to collect or estimate new activity-level information for every company.
• Portfolio-level results show close correspondence between the two frameworks: For the STOXX 1800, the difference between baseline portfolio alignment under the Australian and EU taxonomies was just 0.04 percent. This close correspondence provides a basis for leveraging existing EU Taxonomy data as a starting point for assessing portfolio alignment under the Australian Taxonomy.
• Environmental and social safeguard assessments can materially affect alignment outcomes: The two frameworks differ in their application of Do No Significant Harm (DNSH) and Minimum Social Safeguards (MSS) criteria, which are prerequisites for alignment under the EU Taxonomy but voluntary under the Australian Taxonomy. Different approaches to assessing these safeguards produced varying alignment outcomes, reflecting both the type of information used and differences in how the two frameworks apply these requirements.

“The report’s findings are encouraging for Australian companies and investors seeking to operate in an increasingly interconnected sustainable finance landscape,” said Nicole Yazbek-Martin, Executive Manager, Standards and Market Practice, at ASFI. “The ability to leverage existing EU Taxonomy data to support Australian Taxonomy assessments has the potential to improve efficiency, reduce reporting burdens, and enhance comparability across markets. Equally important, the research offers practical guidance on the similarities and differences between the frameworks, helping market participants make more informed and confident decisions.”

To download a copy of the full report, please click here.

About ISS STOXX Sustainability
ISS STOXX Sustainability enables investors to develop and integrate responsible investing policies and practices, engage on sustainable investment issues, and monitor portfolio company practices through screening solutions. It also provides data, analytics, and advisory services to help financial market participants understand, measure, and act on sustainability-related risks across all asset classes. In addition, its solutions include corporate and country research and ratings enabling its clients to identify potential material sustainability risks and opportunities.

About ISS STOXX
ISS STOXX provides actionable insights through its comprehensive product offerings, proven expertise, and high-quality data that capital market participants around the world can use to inform their decision-making. Across indices, investment stewardship, corporate governance, sustainability, and fund intelligence, institutional investors and companies rely on us to help them manage investments, strengthen their governance practices, and bring new products to market. ISS STOXX, which is owned by Deutsche Börse Group, employs approximately 4,000 professionals operating across 34 locations in 20 countries. ISS STOXX’s clients include many of the world’s leading institutional investors and corporate issuers who turn to ISS STOXX for its objective and varied offerings.