The need and opportunities for environmental repair and regeneration have driven a fast-evolving agenda around green and blue financing and development of a new language and taxonomies for navigating these financial areas and investment decision-making. More recently, there has been a strong push to define common language frameworks and taxonomies to help financiers, nations, corporations and borrowers align understanding on what green finance means and how it is applied.

In 2016, the G20 Study Group identified a lack of clarity in definitions as one of many obstacles to scaling up green financing. Following this the World Bank developed the guide, Developing a National Green Taxonomy, addressing the need among financial market participants for clarity and transparency in what is understood and what qualifies as green. Further the World Bank Group – based on its experience in shaping the debate on sustainable finance and its understanding of the very diverse national contexts of emerging economies – recommended a series of principles and methodologies for developing a taxonomy of environmentally sustainable activities.

Further, the International Capital Market Association (ICMA) working with multilateral development banks, such as the World Bank Group, as well as banks, bond issuers, and investors, developed Green Bond Principles (GBP) and Green Loan Principles (GLP). These reporting and transparency guidelines list high level project categories to assist issuers of green bonds and loans.

Although green finance definitions are very complex, efforts to understand green finance are now converging on the financing of activities that can address climate change and other environmental challenges, such as natural resource conservation, biodiversity conservation, and pollution prevention and control.

OUR EXPERTISE

Blueshift’s consultants have been closely involved in many of the major initiatives associated with this green evolution over the last 20 years, including the UNEP Finance Initiative (UNEPFI), Principles for Responsible Investment (PRI) and Climate Disclosure Project (CDP).

PROJECT HIGHLIGHTS