Australia has launched its very own Sustainable Finance Taxonomy, a long-awaited framework to classify what counts as ‘sustainable’. It follows global moves led by the EU, and aims to categorise a range of economic activities, highlighting ‘green’ leaders, as well as sectors making the ‘transition’.
Linda Romanovska is the perfect guest to help us make sense of it all. In the episode she helps us understand why it’s important to investors, how we can use it, and how it compares and interacts with other global models.
Linda is a global taxonomy expert, she’s contributed to the development of sustainable finance taxonomies in the EU, South Asia and right here in Australia. At the same time she’s worked as a senior sustainable finance advisor working with boutique consultancies as well as the Big4.
And if that’s not enough to keep her busy, she’s also doing a PHD exploring the intersection of nature and sustainable finance.
Download the Taxonomy FIELD GUIDE
There were so many really powerful nuggets in this episode that I convinced Linda to summarise the key insights into a one-page Taxonomy FIELD GUIDE. It outlines the key opportunities of aligning a portfolio with the Australian framework, and how it compares globally.
On this episode…
Linda’s insights do deep, but most importantly they’re practical, breaking down the nature of a taxonomy within the global context, highlighting sectors where it has the potential to make an impact, and how it fits within the broader sustainable finance roadmap in Australia.
My key takeaway this week…
“Aligning with the taxonomy can help your market positioning as a sustainable entity, towards consumers that have specific value choices that they make in their consumption. But also, it potentially opens up your access to sustainable finance. Sometimes the cost of capital can be better if you can demonstrate sustainability credentials.”
“So from a company perspective, it’s not always someone external using the taxonomy to judge you. No, it’s actually a tool for you to highlight your own credentials, and your own good deeds in what you’re doing.”
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Australian Sustainable Finance Institute
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Full Transcript
Note: this was an automated production by Otter.ai, some errors may remain
John Treadgold
Now I’m going to dive straight in and ask why do we use this term taxonomy? It sounds very scientific, plus it starts with the word tax, which is never a good idea in the world of finance. So why is this word in particular been adopted? And of course, what does it mean?
Linda Romanovska
You’re dropping right straight into the deep end here with the very technical question about the technology of the word taxonomy. And the thing is, the word taxonomy probably could be replaced by another word. And in fact, other taxonomies around the world do not necessarily use the word taxonomy to describe what we are trying to describe here with this tool. The word taxonomy was first used by the European taxonomy of sustainable economic activities. And I would say that that started a transition, in terms of jurisdictional taxonomies being called taxonomies, but the word really means classification system. People may be familiar with the taxonomy of species, which classifies the living world into different categories. And that’s exactly what sustainable finance taxonomy also does.
John Treadgold
Okay, very good. And at least we’ve got a linkage there to the natural world, because that’s what this is really all about in terms of its core outcomes. And that, of course, brings us to Australia’s shiny new taxonomy, designed specifically for our market many years in the making. What does it mean for local companies and investors?
Linda Romanovska
I think the local companies and investors still need to wrap their head around and really understand what does it mean for them and how this new tool that could potentially be a very useful tool could be used and benefit them. And I think we will be impacting that in this conversation.
John Treadgold
All right, so let’s get into some of the details. At its higher level, ⁓ the taxonomy is broken down into these key categories of activities that , know, maybe even that itself is important activities that operates at the activity level, as well as an entity level, but the activity itself is really key. And these are broken down, they can be the green or transition activities. Can you talk us through this language and this model?
Linda Romanovska
Yes, you touch upon the point that the taxonomy is the granularity level is of a taxonomy is on the activity level. Why is that important? Because think of an activity or something that a let’s assume a company does. And a company can be doing many different things. And some of those things can be similar and some of them can be quite dissimilar. And some of those things could be done sustainably and some of those things could be done less sustainably, from an environmental perspective or social perspective.
And so if we are only looking at a whole company level, whole entity level, we’re losing that nuance and we’re potentially robbing some of these entities to highlight the areas that they’re doing really well. And so that higher granularity on activity level is really important for taxonomies. And in fact, every taxonomy in the world has been adopting this concept that a taxonomy should be classifying sustainable and less sustainable activities on activity level.
John Treadgold
And when we talk about a company being judged on these activities and their outputs as a whole, it’s really the capital allocators, the investors themselves that are making these judgments. ⁓ is it really the big capital allocators that will be, I guess, using this model or looking for taxonomy alignment? ⁓ And how will it help them?
Linda Romanovska
It can be. So a taxonomy can have various different uses and that is also laid out in the taxonomy document itself. It does map out the different potential uses. But we need to really stress that unlike some other jurisdictional taxonomies, this Australian taxonomy is fully voluntary.
It is developed as a useful tool for a wide range of different users, theoretically. So it can be the company themselves want to highlight all of their activities and sustainability credentials. And the best way for them to do that is on the basis of highly evidence-based, highly objective criteria in terms of what counts as sustainable. And taxonomy offers that. It gives that ⁓ independent view and set of criteria that can be easily applied and used ⁓ by the company themselves and to demonstrate that they’re actually doing something really good or potentially better than their peers in their sector.
Now, there’s absolutely a great incentive for companies themselves to do these taxonomy alignment assessments and report them. What does it do for the company if you can highlight these credentials and you can claim that to a high level your turnover generated by taxonomy aligned activities, it opens certain doors for you.
It opens potentially your market positioning as a sustainable entity in a company, potentially having interested consumers that have specific value choices that they make in their consumption. But also, it potentially opens up your access to sustainable finance, right? And it’s also not only access, but sometimes the cost of capital can be better if you can demonstrate sustainability credentials.
So from a company perspective, I would say it’s not always something external or someone external coming in and using the taxonomy to judge you. No, it’s actually a tool for you to highlight your own credentials and your own good deeds in what you’re doing. Now, can it be used by capital providers? Absolutely, it can be used also by capital providers. It can be used by investment funds that provide equity investments. It can be used by lenders that ⁓ offer different types of sustainable loans or sustainability linked loans. And it also can be used by different issuers, either company issuers or governmental body issuers of bonds, in this case, green bonds, as a way to demonstrate to the investors that want to invest in buy these bonds that our allocation of proceeds from these bonds are truly sustainable. And here we have a independent neutral framework that’s that demonstrates that, right?
So there are many different uses, many different perspectives, ⁓ and all of them have their benefits and why the entities involved in these activities may want to use the example.
John Treadgold
And I mean, when we think about a company, we think about their activities. There’s a lot of activities and that could be such a broad spectrum of their size and length and depth. ⁓ So this leads me to the key feedback or questions and confusions that I’ve been receiving as I’ve spoken to both investors and business leaders about the taxonomy. And that’s understanding what these activities themselves are, and the fact that the taxonomy is actually really explicit. It lists these activities and then has ⁓ goes into a lot of depth with this word technical selection criteria, which is the key data with thresholds and also some decarbonisation measures. So can you give us sort of a bit of insight there of how that was formed and the fact that it really is quite prescriptive?
Linda
Yeah, so the origins of why we need taxonomies in the first place is we need to look at what happened before there was a taxonomy. Before there was a taxonomy, any player in the market could have their completely their own subjective definition of sustainability. There was no regulation around it. There was no one agreed framework. And how do you define whether something is sustainable or not?
And that’s where taxonomy is needed because otherwise the company will have a different definition of sustainability. The bank, another one, the investment fund have a completely different one. A, we cannot compare these definitions because they address completely different aspects. They are not systematic. They’re not structured in the same way. They set very different criteria or parameters for what anyone considers sustainable because essentially they were subjective definitions. Now, taxonomy comes in and it becomes that equalizer. Where it comes together and say, let’s come together, all the stakeholders. And that’s exactly the case.
The stakeholders were involved and are usually always involved in taxonomy development. Let’s come together and agree on something that we all can use as the definition of what is sustainable. And that’s why a taxonomy has to be really prescriptive. Otherwise, we again open the doors to a lot of subjectivity in terms of interpreting. Now, there are some taxonomies in the world that are so-called principles-based taxonomies that do not prescribe a technical screening criteria, that only apply principles.
Principles-based taxonomies, help somewhat, but they don’t fully solve the problem of subjectivity and comparability issues.
John Treadgold
All right. All right. It’s a lot there, but no, I think that makes sense in terms of the challenges that we had previously in terms of what does this word sustainability mean? I don’t know if we’ll ever get past that, but in terms of language, which is I always focus on, that’s always there. And the fact that there are options to be less prescriptive. But I mean you mentioned bond issuance earlier as a key factor. And obviously, in terms of finance, that’s essentially the largest market.
And we’ve had this structure for more than a decade now in terms of green and sustainable bonds. And the rubber really hits the road there in terms of those sustainability definitions, use of proceeds, et cetera. The taxonomy adds another layer to that ⁓ in terms of some really clear definitions. And that’s really useful. And I think that’s what’s coming through is how useful this taxonomy is for bond issuers.
So can you help us understand that, I guess, the layers there in terms of will all green and sustainable bonds ⁓ start to, ⁓ will there be an expectation that they’re taxonomy aligned? ⁓ Will they be different layers or are these two united in terms of if it’s a sustainable bond, then we assume taxonomy aligned.
Linda
There’s no obligation. Bond issuers can follow various different frameworks on defining their bond as green. There are voluntary frameworks out there and you will know them. There are a couple of really prominent ones that are really broadly used across the market. Again, some of them are more principles based, others are more criteria based. Most of them require some sort of third party verification regardless of which framework is being used to really verify that they comply with this framework.
Now, this taxonomy introduces another framework. Is there a chance that the expectations will evolve that whatever is issued in this particular market is aligned with the taxonomy? Yes, that can happen, the reality, however, is that the bonds issued in Australia are not necessarily bought by investors in Australia. They are very often bought by investors abroad. And some of these foreign investors have mandatory obligations in their portfolios to align with other taxonomies, the taxonomies of their jurisdictions.
So what I would see will develop is a mixed set of expectations. International investors in these bonds will potentially want to see alignment with their taxonomies. And will try to at least approximate and see whether what’s happening here in this taxonomy here, what extent is similar to the taxonomy that they need to use or are using already in their domicile market. Now, the local investors well may develop that expectation that if you call it a Green Australia Issued Green Bond, that there is an alignment with the taxonomy. However, there’s no obligation. It could be that the investor simply sets up a parameter and says, will only invest in Australia issued green bond if it aligns with the taxonomy.
John Treadgold
All right. I mean, this is this is something well, Looking broader than the bond issue. But this this question of of utility usability, this is something you and I have spent quite a lot of time discussing in the past three months. And more specifically in exploring whether the local market really understands the implications of the taxonomy and the opportunities that exist. And so I think I should probably mention that you and I are now going to start working together to build a service offering to help firms engage with the taxonomy and understand these opportunities for their business or for their investment portfolio. ⁓ We don’t need to go into too much detail there, but listeners can reach out to either of us on LinkedIn or on my website ⁓ if they want to find out more.
But I think what would be interesting is, you tell us how do you see the local market in terms of ⁓ how potential users are really understanding the nature of this new taxonomy.
Linda
What will need to happen and will inevitably happen is quite a lot of capacity building in the beginning of ⁓ really understanding the tool and starting to think of how could I use it? How can I apply it in my everyday work, both in the real economy market and also among financial services? That is always the case. There’s always a learning curve because not everyone in the market has been part of developing the taxonomy, although many representatives from many sectors and financial services have been part of it.
There are big parts still of the economy that have heard perhaps of the tool, but haven’t really dug deep into it to really understand it. But what we need to stress here, in the case of a voluntary taxonomy, it will always be carrot driven. It will need to be driven by the opportunities, by the possibilities, by the benefits of it. Because if you have a mandatory taxonomy and there are good reasons to mandate taxonomies, which we can discuss perhaps in another podcast. That’s a whole other topic. But in the mandated market, yes, you may have certain penalties if you don’t align or report against a taxonomy that will not exist in the Australian market. And so really the uptake depends on the benefits of it.
And that’s why I think also as this taxonomy is going to evolve and broaden out to the sectors over time, hopefully. We always need to think of are we embedding ⁓ ways or mechanisms in the taxonomy or ways that could be used that actually leverages the opportunities? Because that’s what’s going to drive the uptake.
So the first step is absolutely the learning period. We need to understand what taxonomy is. The second, ⁓ Usually what happens, there’s a bit of a dissolution, right? You get a little hyped and say, fantastic, fantastic tool, I don’t need to worry about trying to set my own definition of sustainability. I don’t need to think about my own metrics. That’s really hard. A lot of resource intensive. I can just simply take a tool.
And now you will look at that tool and realize, but there’s some limitations in that tool. For example, my sector is actually not covered or my sector is covered, but my activity is not covered in the taxonomy. So there will be that learning period where we get the, you know, understanding, then a bit of hype and then a little bit of disillusionment where we say, okay, great tool, but it doesn’t over time need to grow. I will use it for these kind of purposes.
And then as always an adoption of new concepts or technologies or tools, we will come out with that plateau of productivity where people will actually start applying it and testing it and saying, actually it really works for me. It works for these specific areas. And I really hope that I can help develop it further so it can work for me in further areas in the future as well.
John Treadgold
All right. And I want to dig into the EU taxonomy and some of the other global elements, but to lead into that, how interoperable is the Australian taxonomy and is that an important factor in designing one?
Linda
Yeah, so before we start talking about interoperability of local taxonomy with other taxonomies around the world, and by the way, there are almost 60 taxonomies around the world either developed or being developed. It’s a huge, and I think people like to use the word taxomania because that is exactly what is happening. And the reality is these taxonomies have similarities, but they are not the same and they are not ⁓ similar to a very high extent. There are some elements that are similar.
Now, when we judge the similarity of taxonomies, we tend to use two different words for that, or two different concepts. We either talk about interoperability, where two taxonomies are interoperable, or we talk about full alignment, two taxonomies are actually aligned. Now, there are big differences between the two. And alignment is a much more higher ambition in terms of similarity between the taxonomies.
What aligned taxonomies would mean, that if you take an activity and you run through the criteria and it complies with all the criteria, it would have the exact same definition. It would be either taxonomy aligned, green or amber, whatever that taxonomy structure is.
Now, interoperable taxonomies would have similar elements. It would have similar architecture. It would use similar terminology. It would have a similar process of assessing whether something’s aligned or not. For example, the three elements, the Substantial Propulsion Criteria, Do Not Seek It, Pay Income Criteria, and Mineral Social Safeguards. It’s a very common interoperable architecture of taxonomies. But the way that the thresholds are set or the criteria are set do not necessarily lead to the same outcome of the assessment.
So you could have the same activity assessed, it’s done exactly the same way against two taxonomies, the assessment process will be similar and easy to use because you will understand the terminology because it’s completely used exactly the same way. But the outcome may be different. In one taxonomy it will be taxonomy aligned and in another one not. And then another one could be a transition category. Now achieving interoperability is easier and that’s where we’re seeing much more progress among the international taxonomies.
Why I’m talking about this so confidently, I have helped work on the development of taxonomies or comparisons of taxonomies for five different jurisdictions, including the Australian one, including the European one, Southeast Asian one, and a few taxonomies in the Global South. And so I see these patterns happening, right?
Let’s theoretically do an exercise comparing the interoperability of the Australian taxonomy and the European. Why European? There’s always a good reason. When you think about which taxonomy you want to align with or be interoperable with, you can’t be in trouble with all of them because they’re different. So you have to choose. When you make that choice, you think about, well, where could investment come from? Where does the investment come from in my country? Or maybe where I could be investing in another country?
When we look at the biggest sources of investment in Australia, US is always topping the charts there. But when we take all the European countries together as one block, that’s usually somewhere around the second place. And that’s general investment. When we move into the sustainable investment space, because it will be the sustainable investors that are likely to use a taxonomy, globally about 84 % of sustainable investment comes out of Europe.
So theoretically, also most of the foreign sustainable investment in Australia will likely come out of European Union. And so there’s a good reason to try and look at how interoperable the European taxonomy is with the Australian.
So that’s a long way and introduction to actually get to the point. Now there is a level of interoperability between the two. There certainly is the same architecture. As I said, the three concepts of that you have to fulfill, substantial contribution criteria to one of the six environmental objectives that you then have to comply with, do no significant harm criteria, which is a lower bar than substantial contribution to the other of the six objectives, to the five other objectives. And then you also have to comply with minimal social safeguards to say that against social harm. So that is common.
Now, there is an attempt to also align in other areas. For example, both taxonomies target the same six environmental objectives. Their endpoints or ambition statements are not necessarily the same, but they are the same six environmental objectives. So that’s where we have high level of interoperability. Now, when we go in use of terms, it’s a bit of a mixed bag. Yes, there are terms are used in the exact same meaning such as substantial contribution do no significant harm, social safeguards.
However, there are terms and I don’t know whether that’s on purpose or that’s simply just so happened. There are some terms that are used in different meanings and that can cause confusion between the two taxonomies There are terms as eligibility is used very differently, even the the terms, technical screening criteria is not used exactly the same in the two taxonomies. So even these very common terms have different nuances on how they’re actually being used.
Now, because the EU taxonomy is a law and you have to comply with the law and the terms are legal definitions, the European investors will use those definitions because they have to. And so they will come to Australia, see the same terms and think that they mean the same as in Europe, just to be then confused that they actually don’t.
So there are some areas where also the interoperability is not 100%. But overall, it’s not a bad situation.
John Treadgold
All right, this is excellent. That’s some really, really useful detail there. I think that that’s really practical for people to understand. And people will have heard about the EU taxonomy, but I think the interactions between them add another layer of complexity. And now I am hesitant to ask you this question. So I’ll have to ask that we keep at high level, but why is the EU taxonomy so influential? mean, obviously it went out ahead, ⁓ big flows of capital from there, but can you give us a high level view of the structure and how it’s sort of defined the market.
Linda
Well, first of all, it was one of the first ones. It was certainly one of the first jurisdictional taxonomies that was broadly known. And by merit of being one of the first movers, you influence everything else that comes after. Right. So it’s simple, as simple as that. And yes, China, for example, had their system, which when European taxonomy came out, China, in fact, went and adopted and aligned with the European taxonomy in certain aspects, which is really encouraging as well.
And yes, 84 % of sustainable investment capital coming out of Europe, that’s a big, big reason. And the other reason is it’s mandated, right? Because all these investors are going out and saying, I have to use European taxonomy. I may not care that you have a local taxonomy, especially if your local taxonomy is very different from the European one. And so that incentivizes a lot of a lot of countries where there’s a lot of European investment to align with the European taxonomy.
Also, the European taxonomy development process is very, very robust and very, very thorough. The great thing about the European system is that it started with a law, which is the European taxonomy regulation, which set out and embedded in law the principles which have to be observed in the development of taxonomy. And some of those principles are it has to absolutely everything that goes into taxonomy has to be evidence and science based.
And if you don’t do that, if you try and make a taxonomy that is opinion based or political preference based or whatever, it is against the law, you can’t do that. Also the precautionary principle is embedded in that law. It also embeds who are the bodies that need to contribute to the taxonomy development. It also embeds that there needs to be public consultation.
In fact, any criteria that end up in European taxonomy undergoes endless review rounds of ever-growing scopes of different experts and stakeholders contributing, ending with several public consultations.
It’s a very thorough process and that’s why it is believed to have a high level of credibility and robustness and as being evidence-based. And I would agree with that. I’m yet to see another taxonomy development process at that level of robustness that exists in Europe.
John Treadgold
Okay, no, look, very good. And that’s interesting that we can lean on that robustness and that level of detail and that sort of regulatory oversight that, EU and Europe is renowned for flows through and develop that trust and reliability. And now look, winding back to, to give listeners some more detail about the Australian model.
And I think, I think the taxonomy is central part of the Australian sustainable finance roadmap. Of course, the ASFI, the Australian Sustainable Finance Institute, the hard work of Kristy and Nicole has been a really central pathway.
And another element of that roadmap that’s dominating the attention of Australia’s largest companies is mandatory climate reporting. And so this is a you know, a sort of evolving set of structures that are helping this high level definition of what does sustainability mean? So when we have some companies, you know, having to report to the new mandatory climate reporting standards, having to start doing it this year, will taxonomy definitions of green or transition, will it help companies in that reporting process?
Linda
Let me me attack different parts of your question first. I think first we need to be very, very clear that there is a difference between an ASFI roadmap on sustainable finance for Australia, which is fantastic work, as you said, by ASFI, led by Kristy and Nicole. That is a private sector initiative, right? And in many ways it goes ahead of the official government strategy and action plan on sustainable finance.
We have seen that historically how ASFII started in the vacuum of government action on sustainable finance and put together these 37 recommendations, which was a first roadmap and has gone from strengths to strengths from there.
Now, the government in parallel is also working on their approach to sustainable finance and their strategy and action plan. And this is where we need to be clear that some of the things that are in the ASFI fee road are not yet backed or owned by the government the same way. But this area that you’re talking about on mandatory climate related financial disclosures is actually owned by the government and that’s great.
Now, there is no formal connection between the mandatory disclosures by companies and the taxonomy. The taxonomy is not owned by the government. It has not been endorsed as official government endorsed or regulator endorsed tool. While they have been part in overseeing the development of it, it’s not embedded in regulation in any way. Now that is very different from Europe, where these things are actually closely interlinked. And the reason why they’re closely interlinked in that market is that if you want to do a taxonomy alignment assessment, and you are in a financial institution, you want to issue a loan, it is much easier if the recipient of that loan, the company, is already reporting the information of that assessment, they’ve already done a self-assessment.
And that’s why when we think about what makes it easier or faster to allocate capital, it is if the company is already self-reporting the information that a capital allocator will need. And that’s why the thinking in Europe that has been ahead of other jurisdictions has been that we need company reporting to be able to allocate capital.
Now in Australia, we have the first step in company reporting, the control of financial disclosures. But that is not the full information that would be needed by capital allocator to allocate in alignment with the taxonomy. So we’re one step there, we’re not quite there. And I don’t think it will happen anytime soon that we would have full mandated taxonomy reporting by companies, although there are recommendations in the taxonomy of how a company could be reporting against that taxonomy.
So does somehow the taxonomy help the companies to fulfill their mandatory reporting requirements under the AASB S2 standard? Partially. First of all, because the AASB S2 standard primarily focuses on climate risk. Why? Because it is meant to provide information to stakeholders that have financial interest in the company, shareholders or capital providers. What they are concerned is about, is my investment at risk if I invest in this entity or provide capital to them?
And that is big, big component of that is physical climate risk. It’s your floods, your bushfires, your droughts, your intense rains, all of that, which is completely absent currently from the taxonomy apart from the do no significant harm to adaptation criteria. But there is no adaptation taxonomy. So that part, there is very little connection.
Where it can help is in the assessment and management of transition risks, which link to your greenhouse gas emissions. Because if you are an entity that is highly emitting or in a sector that is considered highly emitting sector, then you have a transition risk. And that is also covered by the mandatory climate related disclosures.
The taxonomy in this case, what it can do, it can help you prove that you may be operating in high emission sector, but you are not high emitting, and therefore you don’t have that risk. And that’s a very valuable information to your shareholders.
John Treadgold
Yeah, look, I think that last point, that’s a really key outcome of the taxonomy itself. And that’s, as we come to the end here, I think some really practical insights here and a really great overview of the taxonomy, helping people understand how they’ll be able to use it. But stretching even further back, is there a high level longer term impact? An enduring sort of outcome that you feel that taxonomy is bringing to the Australian financial services industry.
Linda
I think one element that I would love to see happen now that we have the taxonomy, hey, yes, first we need to take care that it gets actually socialized with the entities that will benefit from it and taking up and they’re assessing or going on. But over time, what I would like to see is also a monitoring mechanism, that would then show how much investment either by capital providers was provided or how much capital was provided on the basis of a taxonomy or two taxonomy aligned activities and entities. And also how much capital expenditure companies invested in aspects of activities or measures that are taxonomy aligned.
Because that would then show us whether the taxonomy is a useful tool, a) to identify these kind of sustainable finance flows, but also judge their size in the economy. And I think that’s one of the really interesting uses of taxonomy as well, but it’s not only useful for these individual entities using it, but it’s really useful for monitoring the whole market and the scale of sustainable finance flows.
So I do hope that over time we could be thinking about setting up this kind of monitoring system, which probably would need to be run by a regulator entity, using a robust methodology and how do you identify that. But then it would give us so much more insight in terms of what’s happening in our market and what are the characteristics of the sustainable finance allocation of capital here.
John Treadgold
Well, that’s right. Those changes over time in terms of the different activities and the different sectors would be really interesting and it would, I guess, isolate what we call this sustainable investment universe, which at the moment is quite amorphous. Yeah, really trying to define that, which is something I’m always really focused on. And now, Linda, my final question, it’s a little bit more personal and that’s to ask what you’re reading. I don’t know if I’ve put you on the spot here. It could be fiction, non-fiction, what’s on your side table?
Linda (35:39)
Oh, there are all sorts of regulatory changes in sustainability almost every week that are being announced. I consult companies on sustainability. I consult financial services entities. I need to be staying on top of all these regulatory changes. As you may know, there’s a big process in Europe called omnibus regulation proposal that brings a lot of changes quite regularly and I need to be staying on top of that as well.
Linda (36:05)
I’m following what’s happening in the US markets and Asian markets, also Australian developments, there’s a lot of interesting happening where readings on an interim target on climate, for example. So there’s a lot of information coming out. So certainly it’s time to stay on top professionally. But I’m at the same time also carrying out my PhD research and I’m reading a lot of scientific literature. And currently there’s a lot of methodological reading on embedded research in how I can carry out research as embedded policymaker in some of these policymaking processes.
John Treadgold (36:42)
Okay, and is that the topic of the PhD itself, the methodological process?
Linda (36:45)
But the topic of my, no, the process is only the process that I employ in the research.
The topic of my PhD links to sustainable finance and I’m looking at how we can integrate nature and nature-based solutions in sustainable finance frameworks better. Namely how can we include nature-based solutions in taxonomies. And as a result of that work, I’ve already built that’s already an official proposal for integration of nature-based solutions for the European Union taxonomy. That is part of the official policy making process. It really only has a couple of last hurdles before being adopted into the taxonomy as well.
John Treadgold
Amazing. Well, look, that’s a whole other series of podcasts when you get closer to publishing your PhD. We’ll be keen to dive into that. And of course, Natural Capital and Nature-Based Solutions is a really exciting emerging area. So looking forward to that.
And look, thank you again for today. So much detail, we could do another whole series of podcasts diving into each of those sections, but a really good overview for our listeners. So thank you, Linda.
Linda
Thanks for having me.
