In Focus: Unlocking ASEAN Taxonomy for Sustainable Finance Version 2
ASEAN FOR BUSINESS Monthly Bulletin April 2023
HSU-SHENG WONG
Green Taxonomy is an economic activity classification that supports environmental protection and management efforts, as well as mitigation and adaptation to climate change. Green Taxonomy plays an important role in driving investments to accelerate the transition towards the green economy. Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam have started the journey in developing their national taxonomy to enable a just transition towards sustainable economy. In addition, the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM) recognises that a common understanding of what is sustainable in ASEAN and a credible regional sustainable finance taxonomy, which is interoperable with other regional and international taxonomies, is essential to attract and orient capital toward sustainable investments.
Against this background, the ASEAN Taxonomy Board (ATB), which represents ASEAN finance sectoral bodies, launched the ASEAN Taxonomy for Sustainable Finance Version 1 in November 2021 and Version 2 on 28 March 2023. The ASEAN Taxonomy provides an overarching guide and acts as a common building block to enable an orderly just transition and foster sustainable finance adoption by AMS. The taxonomy is expected to be utilised by diverse users, including businesses, investors, governments, financial institutions, asset managers, and rating agencies.
