2023 has been the year of the taxonomy

Our international ESG team has been keeping an eye on what’s going on with regards to green taxonomies. With so much activity already this year, we summarize some of the key developments below.

EU

We recently published this reminder of the EU’s taxonomy framework. Our publication is particularly relevant to non-EU groups with large subsidiaries in the EU. They will soon have to report on taxonomy alignment.

Brazil

Meanwhile, Brazil’s draft Sustainable Taxonomy Action Plan, is currently under public consultation and receiving contributions and comments for its improvement. The deadline for taking part in the public consultation is October 20, 2023. Find out more, here.

ISSB

Earlier this year we reported on the International Sustainability Standards Board’s Proposed IFRS Sustainability Disclosure Taxonomy, which was published for public consultation.

Hong Kong

The ISSB’s work followed hot on the heels of the “Prototype of a Green Classification Framework for Hong Kong”, which we wrote about here. We await details of Hong Kong’s inaugural green taxonomy prototype.

ASEAN / Singapore

On March 27, 2023, the ASEAN Taxonomy Board released Version 2 of the ASEAN Taxonomy for Sustainable Finance, which we wrote about here. This blog post also covered developments in Singapore on a green and transition taxonomy designed for financial institutions in the city state.

UK

Meanwhile, the UK’s Green Technical Advisory Group (GTAG) has also been busy and in August and September published a number of documents setting out its recommendations, including in respect of “Implementing an effective reporting regime for the UK Green Taxonomy”, “Developing a UK taxonomy adapted to the UK’s needs in the short and medium term: Scope, coverage and reporting considerations”, “Operational considerations for taxonomy reporting: assessing and dealing with data gaps and the use of proxies” and “Treatment of green financial products under an evolving UK Green Taxonomy”.

On 5 October 2023, in the “Closing statement” from the Chair of the GTAG, GTAG announced the publication of its paper on the long term ‘institutional home’ for the Green Taxonomy, stating that “This completes the suite of 9 GTAG papers that have summarized the independent advice the GTAG has offered to the UK Government since the inception of GTAG in June 2021” and that GTAG looks “forward to supporting the next stage of the Government’s efforts to introduce a UK Green Taxonomy that is welcomed by the market as being robust, useful and usable.” We await the UK government’s upcoming consultation.

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