SBFN Sustainable Finance Instruments Working Group
About This Working Group
SBFN members are committed to leveraging green and sustainability-focused capital flows to build resilient and inclusive economies. They are therefore interested in the tools and instruments that can be used to unlock the trillions of dollars in green, social, and climate-related investment opportunities in emerging markets.
The Sustainable Finance Instruments Working Group (formerly the Green Bond Working Group) responds to members’ interest in the rapidly expanding market for and innovations in sustainable finance instruments.
It led to the 2018 report Creating Green Bond Markets, which mapped green bond market developments in over 22 emerging markets and included a practical toolkit for SBFN members.
Between 2022 and 2024, the working group focused on developments in national and regional sustainable finance taxonomies as a tool to define eligible assets that help achieve environmental and social goals and prevent greenwashing.
Launch of SBFN Taxonomy Toolkit
On May 2024, SBFN launched a toolkit on Sustainable Finance Taxonomies, which resulted from work by the Sustainable Finance Instruments Working Group between February 2022 and April 2024. The toolkit is part of a series of Toolkits developed by SBFN to support member countries to develop the national enabling frameworks for sustainable finance. Read more
On 24 April 2024, SBFN held a webinar to mark the launch and present the Toolkit. Read more
The case for sustainable finance taxonomies
Over the past decade, SBFN members have identified national sustainable finance taxonomies as a key step in their national sustainable finance roadmaps and an essential tool to help the financial sector define and evaluate projects, assets, and activities that qualify as green, socially inclusive, and sustainable.
Clear and consistent definitions are crucial in mobilizing financial flows into sectors that have positive environmental and social impacts. Taxonomies can also ensure that projects meet national regulations and international standards for managing environmental, social, and governance (ESG) risk.
In 2023, IFC and the Equator Principles Association published related research on “Promoting Interoperability Across Environmental and Social Risk Management Frameworks: How the IFC Environmental and Social Performance Standards and World Bank Group Environmental, Health and Safety Guidelines Align with the EU Taxonomy’s “Do No Significant Harm” and Minimum Safeguards Criteria”
As taxonomies gain credibility, they have significant potential to scale up finance in projects that meet environmental and social goals, including the transition to low-carbon and climate resilient economies.
Advancing interoperability and comparability of taxonomies
One of the key findings and recommendations from the assessment conducted as part of SBFN’s 2024 Global Progress Brief published in April 2024, was the need for greater alignment, interoperability, and comparability of sustainable finance frameworks, including taxonomies. In the recent years, many countries and a few regions have developed taxonomies to facilitate sustainable financing; however, they are too varied to work together, creating inconsistent standards that make life complicated for investors and presents challenges to enable cross-border investments. To ensure the consistent applicability of sustainable finance taxonomies across borders, a common playbook with universal principles is needed.
In this context, SBFN and the Central Bank of the Azerbaijan Republic (CBAR) have co-developed the “Roadmap for Advancing Interoperability and Comparability of Sustainable Finance Taxonomies” in partnership with international partners including the International Platform on Sustainable Finance (IPSF) and the United Nations Development Programme (UNDP). The roadmap was officially launched at COP29 in Baku, Azerbaijan on November 14th, 2024. Read more.
The roadmap proposes the following three key priorities with actionable steps:
- Defining Core Taxonomy Activities: Identifying essential sectors and activities for Emerging Markets and Developing Economies (EMDEs) with a shared classification system.
- Technical Approaches for Consistent Alignment: Creating standardized alignment approaches for taxonomy principles, including environmental, social, and governance (ESG) guidelines.
- Supporting Transition Finance: Setting guidelines for transition activities that enable decarbonization and sustainability in high-emission sectors.
Following the adoption of the Roadmap, SBFN’s Sustainable Finance Instruments Working Group, together with partners, will support the implementation of the principles set forth in the Roadmap across emerging markets.
Working group activities and outputs
The working group is currently chaired by Indonesia Financial Services Authority (OJK), National Treasury of South Africa and Latin American Banking Federation (FELABAN).
Research and engagement were carried out by the SBFN Secretariat. SBFN members gave feedback on research findings and a draft Taxonomy Toolkit at four consultation meetings:
First Meeting of the SBFN Sustainable Finance Instruments Working Group | 24 February 2022 |
Regional meeting of the SBFN Sustainable Finance Instruments Working Group: Latin America and the Caribbean | 13 October 2022 |
Regional meeting of the SBFN Sustainable Finance Instruments Working Group: | 20 October 2022 |
SBFN member consultation on Taxonomy Toolkit | 20 March 2024 |
In addition, the working group has engaged actively with SBFN members, partner agencies, and experts to explore and support the global trend in taxonomy development and implementation to support sustainable finance:
- Detailed benchmarking of 12 SBFN countries that have issued sustainable finance taxonomies, as well as comparison with regional taxonomies by the Association for South-East Asian Nations (ASEAN) and the European Union.
- Webinars and virtual peer-to-peer learning for SBFN members to learn directly from each other as they develop taxonomies.
- Training delivered to countries starting out on their taxonomy journeys.
- Cooperation with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to develop an e-learning on Sustainable Finance Taxonomies, published on the UNCC-eLearn platform in English, French and Spanish: https://unccelearn.org/course/view.php?id=160&page=overview.
- Collaboration with staff from the World Bank, IMF, and OECD, with input from staff from BIS, to publish a paper on “Activating Alignment: Applying the G-20 Principles for Sustainable Finance Alignment with a Focus on Climate Change Mitigation” (September 2023), https://www.worldbank.org/en/topic/financialsector/publication/activating-alignment
- Development of a Toolkit on Sustainable Finance Taxonomies for use by members.
Working Group Co-Chairs
Mr. Vukile Davidson
Chief Director: Financial Markets and Stability, National Treasury of South Africa
Mr. Henry Rialdi
Department Head, Department of Surveillance and Integrated Financial Services Sector Policy, Otoritas Jasa Keuangan (Indonesia, Financial Services Authority)
Mr. Giorgio Trettenero
Secretary General, Latin American Banking Federation, FELABAN
Working Group Members
Click on the green bar below to search the table of contributing members and organisations.
You can also search keywords in each table by using the search box.
| Region | Country | Organisation |
|---|---|---|
| Asia & Pacific | Cambodia | The Association of Banks in Cambodia |
| Asia & Pacific | China | China Banking Association |
| Asia & Pacific | Fiji | Reserve Bank of Fiji (RBF) |
| Asia & Pacific | Indonesia | Indonesia Financial Services Authority (OJK) (co-chair) |
| Asia & Pacific | Maldives | Maldives Monetary Authority |
| Asia & Pacific | Mongolia | Bank of Mongolia |
| Asia & Pacific | Mongolia | Mongolian Sustainable Finance Association (MSFA) |
| Asia & Pacific | Philippines | Bangko Sentral ng Pilipinas |
| Asia & Pacific | Samoa | Central Bank of Samoa |
| Asia & Pacific | Sri Lanka | Central Bank of Sri Lanka |
| Asia & Pacific | Viet Nam | State Bank of Viet Nam |
| Eastern Europe and Central Asia | Armenia | Central Bank of Armenia |
| Eastern Europe and Central Asia | Georgia | National Bank of Georgia |
| Eastern Europe and Central Asia | Kyrgyz Republic | The Union of Banks of Kyrgyzstan |
| Eastern Europe and Central Asia | Moldova | National Bank of Moldova |
| Eastern Europe and Central Asia | Serbia | Association of Serbian Banks |
| Eastern Europe and Central Asia | Turkey | Banking Regulation and Supervision Agency of Turkey (BRSA) |
| Eastern Europe and Central Asia | Ukraine | National Bank of Ukraine |
| Eastern Europe and Central Asia | Ukraine | National Securities and Stock MArket Commission of Ukraine |
| Latin America the Caribbean | Brazil | FEBRABAN |
| Latin America the Caribbean | Colombia | Asobancaria |
| Latin America the Caribbean | Colombia | Superintendencia Financiera de Colombia |
| Latin America the Caribbean | Costa Rica | Costa Rica´s General Superintendence of Financial Institutions |
| Latin America the Caribbean | Honduras | National Commission of Banks and Insurance (CNBS) |
| Latin America the Caribbean | Panama | Banco General, S.A. |
| Latin America the Caribbean | Paraguay | CENTRAL BANK OF PARAGUAY |
| Latin America the Caribbean | Paraguay | Mesa de Finanzas Sostenibles del Paraguay |
| Latin America the Caribbean | Regional, Eastern Caribbean | Eastern Caribbean Central Bank |
| Latin America the Caribbean | Regional, LAC | FELABAN (Latin American Banks Federation) (co-chair) |
| Middle East & Africa | Egypt | Central Bank of Egypt |
| Middle East & Africa | Ghana | Bank of Ghana |
| Middle East & Africa | Ghana | Ghana Association of Banks |
| Middle East & Africa | Iraq | Central Bank of Iraq |
| Middle East & Africa | Morocco | Autorité Marocaine du Marché des Capitaux (AMMC) |
| Middle East & Africa | Nigeria | Central Bank of Nigeria |
| Middle East & Africa | Regional, Central Africa | COSUMAF |
| Middle East & Africa | South Africa | The Banking Association of South Africa |
| Middle East & Africa | South Africa | National Treasury South Africa (co-chair) |
Working Group Meetings
In February 2022, the working group hosted its first meeting.
Over 100 participants joined the 2-hour virtual discussion, representing SBFN members and partner organizations.
The meeting included presentations from a panel of experts active on the frontier of national taxonomy development and efforts towards global and regional convergence.
Ms. Denise Odaro
Head of Investor Relations, International Finance Corporation
Chair of the Steering Committee of the Green and Social Bond Principles, ICMA – on the landscape of sustainable finance opportunities.
Ms. Farah Imrana Hussain
Senior Financial Officer, World Bank : Emerging good practice and insights from World Bank Group experiences supporting emerging markets to develop taxonomies.
Dr. Ma Jun
Chairman of Green Finance Committee of China Society for Finance and Banking, Co-Chair of G20 Sustainable Finance Working Group, Co-Chair of IPSF Taxonomy Working Group.s
Mr. Ephyro Luis Amatong
Commissioner at Securities & Exchange Commission, Republic of the Philippines
Experience of the ASEAN Capital Markets Forum in developing regional taxonomy – on the powerful example of collaboration among ASEAN countries on a joint taxonomy.
Ms. Christelle van Vuuren
Director, Carbon Trust, Africa
on the South African Process to develop a green finance taxonomy aligned with the EU approach.