The sustainable bond markets have grown exponentially since 2014. As sustainable finance has become mainstream, there has been increasing interest from the official sector and financial market participants in whether there is a need for taxonomies and how to develop them to provide clear guidance to the market on what activities, assets and/or projects are eligible as green.
This paper provides an international overview of official and market-based taxonomies of which there are an increasing number with multiple initiatives arising in line with the mainstreaming of sustainable finance. It summarizes the various approaches that have been taken as well as the different objectives that are being pursued.
The paper aims to help market participants and stakeholders better understand existing taxonomies and their usage. It is designed to inform policy makers and the regulatory community in their reflections on the pertinence of further taxonomy related initiatives and the goals that they may wish to pursue with these efforts.