In the realm of sustainable finance, the clarity and credibility of categorising economic activities have received a substantial boost with the introduction of the Independent Science Based Taxonomy (ISBT).
This novel tool, accessible freely to businesses, financial institutions, and other stakeholders, offers a rigorous classification system rooted entirely in climate and environmental science. The importance of such taxonomies lies in their role as a science-based language that aids in identifying and investing in truly sustainable enterprises.
Across the globe, the push for robust sustainable finance taxonomies is gaining momentum, with over 60 jurisdictions actively developing their own frameworks. This growing consensus underscores the crucial need for clear, unambiguous standards that define sustainable economic activities. Nevertheless, some existing taxonomies have been criticised for succumbing to political pressures or corporate lobbying, which can lead to questionable inclusions that may enable greenwashing. A prominent example of this is seen in the EU Taxonomy, where the classification of gas-fired and nuclear power plants as sustainable has sparked significant controversy, prompting legal challenges from environmental groups.
The ISBT emerges as a beacon of integrity in this complex landscape, setting itself apart by adhering strictly to evidence-based and lobby-free criteria. By evaluating and enhancing the EU Taxonomy through solid scientific recommendations and additional rigorous criteria, the ISBT aims to forge transformative standards that will facilitate a genuine transition to a sustainable future—one that equally benefits humanity and the natural world.
This initiative is a collaborative effort involving civil society organisations, academia, and the scientific community, along with other independent entities dedicated to fostering a taxonomy built on uncompromised scientific evidence.
Vedran Kordic, the EU Taxonomy Coordinator at WWF EU, emphasized, “This independent science-based approach will empower informed decision-making and accelerate the transition to a sustainable future.”
Mathilde Crepy, Head of Environmental Transparency at ECOS, stated, “Sustainable finance policies need a compass to direct investments towards activities that are proven to benefit the environment. The ISBT – with its focus on science instead of commercial interests – helps to set a high level of environmental ambition that will serve our collective future.”
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