January – 12, 2024 – Makhtar Diop, IFC’s Managing Director, has called for global alignment of sustainable finance taxonomies to direct capital to urgent common goals, such as addressing climate change. He explains that, while each country has its own needs and priorities, policymakers and regulators can identify common design features, align impact metrics and accounting standards, and embrace an “adopt or adapt” approach — borrowing templates or criteria from others and adjusting as needed. 43 sustainable finance taxonomies or lists of eligible activities have been issued globally since 2012. 28 are national taxonomies, issued by 18 different countries, of which 12 are SBFN member countries: Bangladesh, Brazil, China, Colombia, Georgia, Indonesia, Kazakhstan, Mexico, Mongolia, South Africa, Sri Lanka and Thailand. Most taxonomies tackle environmental challenges, such as climate change, pollution prevention, circular economy, and protection of water resources, biodiversity, and ecosystems, but a growing number support climate transition, social objectives, and the SDGs. SBFN has conducted extensive research and engagement with members over the past year to capture lessons learned and innovative approaches.
The findings and guidance will be released in SBFN’s upcoming Taxonomy Toolkit, being developed in cooperation with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. To learn more, register for the GIZ e-learning on Introduction to Sustainable Finance Taxonomiesand read the IMF, World Bank, and OECD staff paper on Activating Alignment (published September 2023)