IPSF Releases Common Ground Taxonomy Built on EU, China Green Taxonomies

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  • IPSF Releases Common Ground Taxonomy Built on EU, China Green Taxonomies

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    The International Platform on Sustainable Finance (IPSF) on November 4 released the Common Ground Taxonomy, a green investment classification system built on the green taxonomies of the EU and China, as reported by Caixin Global on November 5. Developed over two years, the Common Ground Taxonomy analyzes 80 economic activities across six industrial sectors, with a focus on climate change mitigation activities. It aims to help sustainable businesses in the two markets conduct cross-border investments and improve comparability and interoperability of taxonomies around the world.

    In July 2020, China and the EU launched a working group on taxonomies with the goal to assess comprehensively the two entities’ existing sustainability taxonomies, identifying commonalities and differences in their respective approaches and outcomes. The EU Taxonomy refers to the Action Plan on Financing Sustainable Growth, proposed by the European Commission in May 2018. The Chinese taxonomy refers to the 2021 edition of Green Bond Endorsed Project Catalogue, issued by PBoC, CSRC, and NDRC in May.

    The IPSF is a multilateral forum aiming to enable the exchange of practices and increase international collaborations on matters related to sustainable finance. Founded on October 18, 2019, by the European Union, the IPSF also includes relevant authorities such as Argentina, Canada, Chile, China, India, Kenya, and Morocco. Since its founding, more Asia-Pacific authorities have joined the organization, including Indonesia, Japan, Malaysia, New Zealand, and Singapore. Together, all members of IPSF represent 55% of the world’s greenhouse gas emissions, 50% of the world population, and 55% of the world’s GDP.

    Sources:

    https://www.caixinglobal.com/2021-11-05/with-an-eye-on-cross-border-investment-china-and-eu-craft-joint-standards-for-green-projects-101801143.html

    https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/international-platform-sustainable-finance_en

    https://www.e3g.org/news/eu-and-china-signal-points-of-agreement-for-defining-green-investment-but-leave-door-open-for-fossil-fuels/

    https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/211104-ipsf-common-ground-taxonomy-instruction-report_en.pdf

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