Centre For Sustainable Finance Makes Recommendations To Government On A NZ Sustainable Finance Taxonomy

The Centre for Sustainable Finance: Toitū Tahua has today published the Key Design Recommendations for Developing a Sustainable Finance Taxonomy for Aotearoa New Zealand.  

CSF was tasked by the Government to convene an Independent Technical Advisory Group (ITAG) to prepare and publish the non-binding advice on the design of a taxonomy and provide its recommendations to the Climate Change Minister. 

The ITAG is comprised of climate, iwi/Māori, academia, data and sustainable finance experts, convened by CSF with technical guidance provided by the Climate Bonds Initiative. 

A green or sustainable finance taxonomy is a standardised framework for classifying economic activities according to their environmental performance. This allows investors to identify and invest in green activities while avoiding those that cause significant harm to the environment.  

It helps to align investment decisions with environmental objectives and to avoid assets that are not aligned with the goals of the Paris Agreement. It can also direct capital flows towards new green technologies and increase the overall transparency of the financial sector through more transparent reporting Jo Kelly, Chief Executive CSF said, “CSF convened the independent expert group to facilitate the development of the recommendations, and we are pleased to now provide this advice to the Government.

“A sustainable finance taxonomy will reduce friction in the financial system by providing clarity and consistency about which economic activities are green or transitioning to become green, in a way that is recognizable and credible to international investors and partners - many of whom already have taxonomies in place or, like Australia, are well on the way,” Ms. Kelly said.

The publication of the recommendations follows a consultation period earlier this year, during which the Independent Technical Advisory Group (ITAG) put forward its draft recommendations for feedback from financial market participants and stakeholders. 

The ITAG proposes the following key sectors should be prioritised under the taxonomy given their importance to our low-emissions transition: Agriculture, Forestry, Fishery, Transport, Energy, Construction and Real Estate, Industrial Manufacturing.  

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