Update of our study “The New Geography of Taxonomies”

Our global benchmark of Taxonomies, first published in November 2021, examines and interprets developments in the field of sustainable finance taxonomies, which have multiplied across jurisdictions to support the shift in global capital. Since then, 10 new taxonomies in Europe, Asia-Pacific and the Americas were published and another 12 were initiated, including in Africa. We analyzed their comprehensiveness, sophistication, usability and ambition.

 

Our expertise in the domain has recently been recognized by the appointment of Robert White, to the Australian Taxonomy Technical Expert Group (TTEG). The TTEG will provide "strategic direction over, input into and endorsement of" the country's sustainable finance taxonomy to be considered by authorities.

 

There have been important milestones in the market in 2022 and 2023. These are featured in the taxonomy progress status section, which provides a high-level overview on the development process across jurisdictions, including delays, advances and the launch of these taxonomies. A few examples are Colombia (2022), Indonesia (2022), South Africa (2022), Mexico (2023) and Thailand (2023). Further details are explored in the section on newcomers.

 

This update also captures the growing focus on transition taxonomies, particularly in Asia Pacific. Countries as Singapore and Australia are looking to incorporate hard-to-abate activities, such as industry, into their eligibility criteria to address main decarbonization levers and align to a 1.5°C trajectory. In addition to transition, resilience is emerging as another important theme to be addressed in Taxonomy development. The Climate Bonds Initiative has published a Whitepaper proposing a structure for a Resilience Taxonomy to focus on the capacity of sectors such as agrifood, infrastructure, health, and nature to respond, resist and adapt to hazardous events, trends or disturbance, while maintaining their essential function and structure.

 

Regional frameworks are also being proposed to facilitate Taxonomy development. In Latin America, a common framework has been published to guide Taxonomy development. This includes best practices on guiding principles, objectives, sectors and technical screening criteria. While in Asia, a second version of the ASEAN Taxonomy was published.

 

Other case studies have been included in this edition. In Latin America, we selected the Mexican Taxonomy, as it includes gender as an eligible category; in Asia-Pacific, we included the Australian Taxonomy, as it looks to incorporate transition categories; and in Europe, we included Georgia’s Sustainable Finance Taxonomy, which includes the social thematic.

 

We will continue accompanying and assessing Taxonomies around the world, so stay tuned for future updates.