EC Provides Update on IPSF Common Ground Taxonomy
The European Commission notified that the International Platform on Sustainable Finance (IPSF) has updated the Common Ground Taxonomy (CGT) instruction report and CGT activities’ table, along with the related frequently asked questions (FAQs). The table of activities has been updated with additional activities contributing to climate change mitigation.
In November 2021, IPSF launched a call for feedback to consult stakeholders on the CGT instruction report and activities’ table. The consultation ran from November 04, 2021 to January 14, 2022. EC has also released summary of feedback received on the consultation. In light of the feedback received and further assessments, the CGT instruction report and table of activities has been updated. The updated version of the CGT covers 72 climate change mitigation activities that share common ground for both the European Union and China taxonomies, with regard to the “substantial contribution” criteria. The updated version of CGT only covers climate change mitigation objective while the other environmental objectives will be progressively covered in the future.
The CGT is based on the activities included in both the adopted European Union taxonomy for sustainable activities and the China green finance taxonomy. It follows a systematic methodology that maps common activities and then compares the technical criteria defining when these activities make a substantial contribution to climate change mitigation. The work at the initial stage involved extraction of climate change mitigation activities from the China green bond taxonomy and the EU Taxonomy, mapping of all economic activities in both taxonomies to facilitate comparison, and selection of priority sectors that would significantly contribute to the carbon emission reduction or sequestration. The International Standard Industrial Classification of All Economic Activities (ISIC) was used as the international reference classification.
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Keywords: Europe, Asia Pacific, EU, China, Banking, Insurance, Securities, Climate Change Risk, ESG, Sustainable Finance, Common Ground Taxonomy, FAQ, Taxonomy, Green Finance, IPSF, EC
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