What does the Singapore-Asia Taxonomy entail?
The Singapore-Asia Taxonomy aims to provide a comprehensive framework for businesses and investors to identify and support sustainable and transition activities. It uses a "traffic light" system to categorize activities into three groups:
Green Activities: These activities significantly contribute to climate change mitigation by operating near-zero-emissions or following a 1.5°C-aligned pathway.
Amber (Transition) Activities: These activities are transitioning towards more sustainable standards or facilitating significant short-term emissions reductions. While they may not yet meet the 1.5°C pathway, they are expected to reach this goal by a defined "sunset date," typically around 2030.
Ineligible Activities: These activities are either unsustainable or incompatible with the 1.5°C pathway, such as high-carbon sectors requiring substantial emissions reductions or phase-out.
Introducing the Tratinsion Category
The amber (transition) category recognizes that some sectors may not immediately meet the green criteria but play a crucial role in achieving short-term emissions reductions. This category provides a structured pathway toward sustainability, incorporating both immediate reductions and long-term goals. Activities in this category must demonstrate a commitment to green standards, with a sunset date (usually around 2030) ensuring they will eventually align with these stricter criteria. The detailed criteria and thresholds for each category help prevent greenwashing and ensure transparency and credibility in sustainability claims.
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