The Independent Science Based Taxonomy (ISBT) released a free tool that categorizes economic activities while ensuring they are entirely backed by climate and environmental science. Taxonomies of sustainable economic activities provide a science-based language for classifying businesses and investments. With a clear categorization system, financial institutions can make informed decisions about where to allocate their money, and policymakers can design regulations that incentivize truly sustainable practices.
The movement for sustainable finance taxonomies has been gaining steam globally. More than 60 jurisdictions are currently developing taxonomies, reflecting a consensus on the need for clear standards for sustainable economic activities. However, existing taxonomies may be influenced by political considerations or business lobbies, leading to the inclusion of activities that are not entirely sustainable, or even enabling greenwashing.
Examples of that are observed in the EU Taxonomy. One well-known instance is the labeling of gas-fired and nuclear power plants as sustainable, a decision that led WWF, along with other green organizations, to file a case against the European Commission in the European Court of Justice.
The Independent Science Based Taxonomy (ISBT) addresses this challenge by being completely evidence-based and lobby-free. ISBT scores the EU Taxonomy criteria and supplements them with recommendations when they lack a solid scientific basis, based on the technical proposals from the Platform on Sustainable Finance, or on any other science-based criteria in a cascading way. This approach aims to create truly paradigm-shifting criteria that will guide the transition to a sustainable future that benefits both people and the planet.
The initiative is the result of close collaboration among CSOs, academics, and members of the scientific community, as well as other independent stakeholders who work to develop a taxonomy fully based on scientific evidence. It’s believed that the independent science-based approach will empower informed decision-making and accelerate the transition to a sustainable future.
Harnessing the collective wisdom of scientists and NGOs, investors can now navigate the multifaceted EU taxonomy criteria and direct investments toward activities that are proven to benefit the environment.
Click here to read the original article published by WWF - World Wide Fund For Nature.
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