Building Shared Language for Green and Sustainable Finance – Expert Briefing on the Development of Taxonomies
Published: UNEP Inquiry and FC4S
New fields of human activity need clear classification to enable participants to operate with clarity and efficiency. In science, a taxonomy deals with the description, identification, naming, and classification of different activities. The rapid growth of green and sustainable finance is now generating the development of taxonomies to underpin future expansion.
Across the world, banks, investors, insurers and stock exchanges are seeking to align their capital allocation decisions, product development, service provision and institutional strategies with new risks and opportunities associated with the transition to sustainable development. Financial centres are at the heart of this shift as they are the places where the demand and supply of capital of sustainable finance comes together. To harness the power of place that comes together in the world’s leading hubs, the network of Financial Centres for Sustainability was launched in September 2017. One of the priority issues facing the members of the network is the core question of definition and taxonomy.