Developing Sustainable Finance Definitions and Taxonomies
A number of countries have created official definitions of sustainable finance as
well as more comprehensive classification systems, referred to as sustainable finance
taxonomies. This report maps sustainable finance definitions and taxonomies in five
jurisdictions: the European Union, People’s Republic of China, Japan, France and the
Netherlands. Taxonomies answer a need for greater certainty on the environmental sustainability
of different types of investments. When appropriately designed, they can improve market
clarity, bring confidence and assurance to investors, and facilitate the measurement
and tracking of sustainable finance flows. The report lays out preliminary considerations
for good design of taxonomies, which can support policy makers to develop and grow
sustainable finance markets to help achieve environmental and sustainable development
goals. It also identifies differences among the taxonomies in scope as well as commonalities.
These commonalities could provide a basis for creating comparable frameworks that
facilitate international investment while also reflecting differing national circumstances.