ASEAN Taxonomy for Sustainable Finance expands to include new areas

The ASEAN Taxonomy Board (ATB) has unveiled Version 3 of the ASEAN Taxonomy for Sustainable Finance, extending its scope to encompass the Transportation & Storage and Construction & Real Estate sectors.

This release signifies a pivotal advancement in ASEAN’s commitment to promoting sustainable finance across the region. By integrating Technical Screening Criteria (TSC) for these additional sectors, the ASEAN Taxonomy aims to streamline sustainable activities within these crucial areas of development.

Version 3 of the ASEAN Taxonomy builds on the foundation laid by previous versions, enhancing the framework for evaluating sustainable activities. The adoption of the multi-tiered framework, comprising the principles-based Foundation Framework and the detailed Plus Standard, facilitates a comprehensive assessment through technical screening criteria. This expansion into new sectors is aligned with international guidelines and regulations, such as the International Maritime Organisation’s 2023 GHG Emissions strategy and various Green building certifications, ensuring credibility and reducing regulatory fragmentation.

The newly introduced TSC covers a broad spectrum of activities, including construction, renovation, demolition, and ownership of buildings, alongside urban and freight transport, and infrastructure for land, water, and air transport. These criteria aim to guide these sectors towards sustainable practices, providing clear pathways for transitioning to greener operations. The ATB has meticulously aligned the Green tiers of these sectors with international standards, tailoring them to fit ASEAN’s unique circumstances while preserving global interoperability.

In her comments on the release, ATB Chair Mdm. Noorrafidah Sulaiman highlighted the significance of this update, stating, “The release of Version 3 marks a significant step forward in our collective efforts to accelerate sustainable development and responsible investment practices in the ASEAN region. The issuance of the TSC for Transportation & Storage and Construction & Real Estate underscores our unwavering commitment to fostering sustainability. We look forward to engaging with stakeholders to ensure the rigour and practicality of the Taxonomy.”

The ASEAN Taxonomy Version 3 also introduces refinements to its annexes, offering additional clarity and practical examples for users. These enhancements, alongside the continuous review and update process aligned with technological, scientific, and economic developments, ensure that the ASEAN Taxonomy remains a dynamic and effective tool for advancing sustainable finance in the region.

The ATB’s commitment to ongoing stakeholder engagement and the scheduled release of TSC for remaining sectors next year further attest to its dedication to fostering a sustainable future for ASEAN.

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