About the Sustainable Finance taxonomy Mapper

Sustainable finance taxonomies are an essential tool in the shift towards a net-zero and more broadly a sustainable economy, offering a clear and standardized framework for classifying investments which substantially contribute to specific environmental objectives. By establishing frameworks to classify sustainable economic activities, jurisdictions can provide much-needed clarity to financial market participants, redirecting capital flows to sustainable industries, and harmonizing green definitions across various entities and jurisdictions.

The European Union (EU) has been at the forefront of this movement, recognizing the critical role of such taxonomies in combating climate change and promoting sustainable growth. Other regions, such as the Association for Southeast Asian Nations (ASEAN) and Latin America and Caribbean (LAC) have been making strides in regional and national taxonomy development—including taxonomies to cover specific areas such as climate change and biodiversity.

The development lead time for sustainable finance taxonomies in many of the countries around the world has been substantial, of over 2 to 3 years just for setting the base legislative framework and agreeing on climate mitigation and adaptation related criteria. In addition, the financial and human resources required for developing green taxonomies is substantial from both governments, regulators as well as commercial and non-commercial actors who are required to come together in both the design and implementation of this innovative type of legislation.

To streamline the decision-making process and promote informed choices in sustainable finance, the project partners have been developing a database of research on national and regional taxonomies, with the intention of launching a public, online tool drawing from this database.

The Sustainable Finance Taxonomy Mapper will serve as a platform for policymakers to navigate the complexities of green taxonomies, enabling them to align their sustainability objectives and make informed decisions. It will also allow companies and financial institutions to more efficiently use sustainable finance taxonomies for their investment decisions.

The Mapper will provide a deep overview of taxonomy developments at several layers of complexity and detail (from governance processes to economic activity). By providing a comprehensive overview of economic activities and their alignment with environmental objectives, the Mapper will enhance clarity, comparability, and harmonization in sustainable finance practices.

By offering a comprehensive view of how economic activities are treated across existing sustainable finance taxonomies, the tool will provide valuable insights and assist in identifying areas that require further deliberation. Moreover, the inclusion of technical screening criteria mapping in such a tool will allow users to assess the stringency of thresholds and diversity of metrics behind them.