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National Green Finance Taxonomy on the Cards

June 9, 2021

National Treasury

National treasury has called for comment on a Draft National Green Finance Taxonomy.

A Green Finance Taxonomy is described as an “official classification or catalogue that defines minimum criteria for assets, projects, and sectors that are eligible to be defined as “green” in line with international best practice and national priorities”.

According to treasury, a Green Finance Taxonomy addresses climate change and other environmental priorities while simultaneously seeking to reduce social risks and enhance social impacts.

“A Taxonomy helps investors, issuers, and other financial sector participants to track, monitor, and demonstrate the credentials of their green activities in a more confident and efficient way.”

The Draft Green Finance Taxonomy flows from the Draft Technical Paper on Financing a Sustainable Economy published for comment in May 2020.

Benefits of the Taxonomy include helping the financial sector with clarity and certainty in selecting green investments in line with international best practice and South Africa’s national policies and priorities; reducing financial sector risks through enhanced management of environmental and social performance; reducing the costs associated with labelling and issuing green financial instrument; unlocking significant investment opportunities for South Africa in a broad range of green and climate-friendly assets and supporting regulatory and supervision oversight of the financial sector.

Comment on the Draft Green Finance Taxonomy is invited until 14 July 2021.

Treasury also seeks comment on two candidates shortlisted for consideration by the finance minister for appointment as Deputy Commissioners of the Financial Sector Conduct Authority.

The shortlisting panel intends recommending Farzana Badat and Katherine Gibson to the minister.

Comment is invited until 14 June 2021.