Across the globe, green taxonomies are catalyzing climate investment in a crucial moment for the world’s fight against climate catastrophe. In 2023, Asia has seen a great deal of progress, with Singapore’s taxonomy following the launch of Thailand’s Taxonomy earlier in the year, and Hong Kong poised to release a taxonomy of its own in the coming months.
Also, Rwanda becomes only the second African Nation to put a green finance taxonomy in place, with South Africa being the first. Africa sits as the continent with the least amount of sustainable debt issuance to date, but the development of taxonomies marks a positive step toward attracting investment.
Both frameworks offer added value to the ongoing, global discussions on how to advance the design of taxonomy architecture. Singapore's taxonomy focused on the operationalization of the traffic-lights approach also enabling alignment of investments in individual measures and not only entire activities - all that to better incorporate and help to mainstream transition finance for hard-to-abate sectors.
Rwanda's taxonomy on the other hand is the first taxonomy developed for a country classified as Least Developed Country. Not only does it adjust for that context - specificity of the economy (e.g. agriculture criteria include special provisions for smallholder farmers); but also, it is likely to be closely linked with and used for, structuring the development aid provided by international agencies.
Notably, 17 taxonomies have already been released and there are more than 30 already in a development or discussion stage. Most taxonomies are nationwide, but there are exceptions, such as regional taxonomies adopted by the European Union and the ASEAN region.
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