CBI presents a new report on global green taxonomy

The global market for green and sustainable finance has seen exponential growth in recent years. This has prompted the development of detailed guidance, in the form of taxonomies, around what constitutes a qualifying investment to achieve desired environmental objectives and maintain market integrity.

The Climate Bonds Initiative (CBI), in collaboration with the UK’s PACT programme, have released the report “Global Green Taxonomy Development, Alignment and Implementation” which highlights the latest trends in taxonomy development and its implications for the future of the sustainable financial market.

The sustainability/green taxonomies add clarity and guidance to market participants by helping investors and companies identify green activities and make informed decisions about sustainable economic activities. A green taxonomy helps regulators and investors reduce the risks of greenwashing, thereby improving integrity and reducing transaction costs in the sustainable financial market.

The report also offers a comparison of the EU and Chinese taxonomies as a case study. Additionally, it describes applications of green taxonomies, including product development, risk management, branding and disclosure. Finally, it concludes that extending existing green taxonomies to include transition guidance for high-emitting sectors will be essential if the objectives of the Paris Agreement are to be met.