Sustainable Finance October 2024 News

Integrating sustainability into economic decision making is critical – both to mitigate risks (especially those presented by climate change) and to realise opportunities for New South Wales.

That’s why the NSW Government is taking bold steps in sustainable finance in the 2024-25 Budget with a specific focus on climate risk, a $119.4 billion sustainable infrastructure investment, and one of the largest sustainability bond programs in Australia.

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What is sustainable finance?

Sustainable finance is ensuring that sustainability considerations are part of economic and financial decision making. It ensures that we can tackle risks and opportunities, and get better long-term returns – both economic/financial returns as well as community, social and environmental returns.

Discover more about sustainable finance and the unique role of NSW Government.

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Climate change is a risk

The Budget highlights the risks that climate change poses to the State.

The Budget refers to the 2021-22 NSW Intergenerational Report which identified climate change as a drag on productivity – everything from days of work lost through heatwaves to significant impacts on agricultural production.

In addition, climate change presents more direct financial risks that aren’t immediately obvious. For example:

increasing natural disasters related to climate change drive up insurance costs and claims and put increasing pressure on the State’s insurance liabilities.
climate change-related litigation is an increasing risk that could affect the value of government securities.

One of the major ways the Government is addressing this is through the newly passed Climate Change (Net Zero Future) Act 2023. This act legislates ambitious all-of-government action to deliver net zero by 2050. Learn more about how NSW is progressing towards net zero.

A sustainable investment in infrastructure

A $119.4 billion infrastructure package was announced in the Budget through to 2027-28. Sustainable finance considerations were central to this infrastructure package: to help NSW grow and thrive, to tackle significant issues, and to support the transition to net zero.

Major sustainable finance highlights in the Budget include:

$62.9 billion for key transport projects to support growing communities, especially the Parramatta Light Rail, the Western Sydney Harbour Tunnel Upgrade, and the Sydney Metro (including Metro West, Western Sydney Airport Metro, and Metro City and Southwest)
$13.4 billion to plan and deliver hospitals and health facilities as well as health programs
$9.5 billion for education and skills infrastructure, which will also deliver new schools in our regions
$6.1 billion for social housing, to address historic underinvestment and help tackle the State’s housing crisis
$5.7 billion to build back infrastructure in communities ravaged by floods and fires – in particular, the Northern Rivers and Central West.
$3.1 billion to build clean power infrastructure across NSW’s Renewable Energy Zones - or REZs – and support reaching net zero targets.

You can also read the Government’s full infrastructure investment statement on the Budget website.

Sustainability Bonds

TCorp (the Government’s financial services partner) provides domestic and international investors with bonds – tradable financial securities – and the capital from these investments is used to help fund government programs.

Since 2018, TCorp has also offered Sustainability Bonds. Compared to standard bonds, the funds raised through Sustainability Bonds are used to fund projects which contribute to environmental and social objectives for the state.

NSW is one of Australia’s largest issuers of sustainability-related bonds: $11.9 billion has been raised from investors to support sustainable projects since 2018.

Learn more about how NSW government applies environmental, social and governance considerations to its financial activities.

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