3. Key issues for sustainable finance definitions and taxonomies

This chapter focuses on sustainable finance definitions and taxonomies as systems of classification for sustainable economic activities and/or financial products. There are two dimensions to a taxonomy: the system itself in all its complexity, and the final product (boiled down to its pragmatic essentials) as it will be used by financial market participants and other users (see below for a discussion on usability issues). Users of taxonomies and definitions are not necessarily interested in understanding why a given metric or threshold must be used for an activity. Rather, they will use the taxonomies and definitions as a final product and screen activities to determine eligibility under the taxonomy. By contrast, policy makers can design the classification systems in various ways. For them, taxonomies are toolkits. By organising the classification system in a number of ways, they can pursue a number of environmental and broader sustainability policy objectives. Sustainable finance taxonomies can be tools to articulate sustainability policy objectives, and are a potentially important element of sustainability policies. A possible analogy could be a smartphone. Smartphone users are not concerned with the internal design and operation of the product. They use the system for a range of practical purposes. Analogously, financial market participants using taxonomies would be smart phone users, and policy makers would be smart phone designers, devising the system to enable and produce a set of functionalities.

The expected user response is a key driver of the design of a system. The issue of who are the users of sustainable finance definitions and taxonomies, and what these users can expect from the definitions and taxonomies, is therefore relevant. Different users have different goals and opportunities.

The stated goal of many sustainable finance definitions is to attract capital to sustainable investment. For instance, the initial proposal for the EU taxonomy regulation states that “[setting out] uniform criteria for determining whether an economic activity is environmentally sustainable… would help ensuring that investment strategies are oriented towards economic activities which are genuinely contributing to the achievement of environmental objectives” (EuropeanCommission, 2018, p. 2[1]). This could be done in many ways – e.g. by signalling what is sustainable, providing incentives for what is considered sustainable etc. A possible measure for the success of definitions could therefore be the amount of additional capital that they attract to sustainable investment, compared to a situation where no official definition existed.

Taxonomies and definitions may be more effective in attracting capital when accompanied by incentives. In turn, the development of incentives relies on taxonomies, as financial products need to be defined before being incentivized. The budgetary cost of providing incentives needs to be considered against the benefits of attracting capital to sustainable investment. In addition, pricing externalities such as carbon emissions may be more economically efficient than providing incentives tied to investments that have varying environmental and social impacts. However, different incentive measures can complement each other, e.g. carbon pricing to make emission-reducing projects and assets more economically attractive, and incentives to promote issuance of and investment in financial products linked to a taxonomy. In addition, financial product-based incentives can be particularly important when pricing for externalities is too low to significantly drive investment.

For taxonomies and definitions to be used, corporates will have to provide the data that is necessary to assess compliance with the threshold included in a taxonomy. One example is the reporting of carbon emissions. Providing data is an opportunity for corporates to improve their performance in addressing climate and sustainability issues and incorporating them in their strategies. A recent survey in the U.K. (Harvey Nash, n.d.[2]) indicates that 46% of boards of publicly listed companies spent zero hours discussing climate change in 2019. However, when the use of definitions is voluntary, there is the danger that those corporates that are already engaged in the low-carbon transition could be burdened with additional reporting if they want to claim the eligibility of their financing, while those not engaged would escape the costs and constraints.

Sustainable finance definitions are an opportunity for asset owners, asset managers and banks to signal the alignment of their existing and future portfolios. For many institutions, sustainable finance is a new frontier, with both a commercial (attracting investment) and reputational aspect. Transparency in terms of data and methodologies will help avoid the danger of green washing1. For financial market participants, like for corporates, those applying a demanding legislative but voluntary taxonomy may come at a disadvantage to those keeping their in-house methodology at no adaptation cost.

A potential use of taxonomies and definitions is to make sustainable finance more accessible to retail investors. Because of the regulation protecting retail savings in many countries, precise definitions of what is “green” or sustainable may be necessary to market this customer base. This is important not just as a potential channel of additional retail capital to match sustainable investment needs. Retail investors are also citizens and voters, and the definitions and selling channels of sustainable finance products can be an opportunity for retail investor engagement in the policy dialogue.

The design of classification systems may be a primary determinant of where sustainable investments will flow moving forward. For example, the EU sustainable finance taxonomy is described as providing “…practical guidance for policy makers, industry and investors on how best to support and invest in economic activities that contribute to achieving a climate neutral economy.” (EuropeanCommission, 2019[3]). Even when the use of a taxonomy is not mandatory and when there are no associated incentive measures, a taxonomy can be expected to spur investment in specific areas and deter investment in other areas. The assumption is that issuers of financial products will use the taxonomy in response to and anticipation of demand from investors, who will be motivated to make their portfolios, or a portion of their portfolios, more consistent with the taxonomy, in view of reputational, risk- or opportunity-related considerations. The use of incentive measures to promote the use of the taxonomy, or even the potential that incentives will be provided in the future, would strengthen the impact of a taxonomy in accelerating and steering investment.

The question of what activities should be eligible for the “sustainable” designation (or other designations, such as “transition”) raises many issues for policy-makers and market actors. For example, in the (relatively narrow) context of climate mitigation policy, the types and level of private sector investments that the government assumes will be made in response to current and planned policies may be estimated in economic models and therefore “known” in a hypothetical sense. However, by setting eligibility thresholds in taxonomies, governments are making these assumptions much more concrete and applicable to investors. Within the bounds and applicability (voluntary or mandatory) of any given taxonomy, the government is no longer leaving to the market the question of what types of investments the market will make in response to or in anticipation of climate policies. Therefore, decisions on thresholds and other eligibility considerations may be seen as having both immediate and long-lasting consequences for investment.

In order to meet climate mitigation objectives, governments will need to consider carefully a range of factors to help ensure that taxonomies drive the “right” types of low-carbon investments. Given the multitude of pathways (see section 3.2.1 below) to meet long-term climate objectives, and the political economy implications of enabling some but not other types of investments, governments will have differing views on which activities should qualify, and how to define eligibility. These different views can be expected to lead to differences among taxonomies. In addition, other considerations, such as approaches for assessing sustainability beyond climate mitigation, could tend to increase differences among taxonomies. Nevertheless, some common approaches for taxonomies could be considered to limit differences in a way that facilitates international investment without unnecessarily constraining national decision-making on how the low-carbon, sustainable transition will be undertaken.

Another important consideration in designing taxonomies relates to usability; users must find that a taxonomy is usable and practical to be effective in influencing investment. Usability may be subjective and difficult to assess. Furthermore, policy-makers may reasonably expect users to go through a period of learning by doing and to endure some level of transaction costs in adapting to the taxonomy and addressing knowledge and data gaps and other challenges. At the same time, policy-makers need to keep practicability firmly in mind to ensure that taxonomies can meet their intended goal – steering and accelerating investment in selected areas. For example, as discussed in the previous chapter, the green mortgage scheme in the Netherlands may not have had a significant direct impact on accelerating investment in “greening homes”, because only a tiny portion of those home owners occupiers doing green investment in their homes actually finance the investment with a bank loan.

The following discussion provides a non-comprehensive overview of important considerations for taxonomies. Building on this discussion and dialogues with experts and governments, technical guidance could be developed to help inform sustainable finance taxonomy design efforts.

Some of the voluntary definitions in use in financial markets focus on screening an economic activity or investment based on a metric that is applied today. For instance, geothermal electricity generation facilities are eligible in the Climate Bonds Initiative taxonomy when their direct emissions are less than 100 gr CO2e per kWh. By contrast, the EU taxonomy is screening a number of activities on the basis not just of a threshold met today, but also of a future trajectory that the activity must follow. This has been a significant input from OECD to the work of the TEG. In the case of geothermal electricity generation, the EU taxonomy reads: “Facilities operating at life cycle emissions lower than 100 g CO2e/kWh, declining to 0 g CO2e/kWh by 2050, are eligible”. Other jurisdictions have different long-term climate policy objectives and will follow different pathways, which could be reflected in their sustainable finance definitions and taxonomies Integrating a future intended trajectory in the criteria embeds a pathway for emissions in the taxonomy. In the case of the EU, the specific pathway is explicit, as the taxonomy refers to a policy objective of reaching carbon neutrality by 2050. Integrating pathways into definitions and taxonomies can help avoid lock-in of emitting activities and assets, and to help ensure that eligible investments will be compatible with long-term policy objectives.

However, pathways have a number of complexities and raise several issues. One is that there are many potential (global) emissions pathways to a given goal, so choosing one of them for the taxonomy requires careful consideration of implications (just as such a choice would require careful thought for other aspects of sustainability policies). For instance, a “net zero carbon economy” in 2050 is not an economy where all economic activities are zero emitting, but an economy where unavoidable remaining emissions are compensated with negative emissions activities. Thus, taxonomies aiming for a net zero carbon economy will need to incorporate thresholds such that some sectoral activities phase out emissions completely by 2050 while others reflect best available technologies and expectations (updated regularly) on the future evolution of BAT. The IPCC SR 15 report in October 2018 (Allen et al., 2018[4]) outlined the many pathways that are compatible with climate objectives.

A second issue worth considering here is that different countries will have different transition pathways. For instance, the trajectories to a net zero economy by 2050 is likely to involve quite different sectors and thresholds in India and in Germany, while both these countries’ net zero trajectories would contribute to a global net zero by 2050 scenario.

A third issue is that if a pathway can be identified for a given economic activity, an approach is still needed to translate the pathway or pathways to the level of a corporate. Corporates rarely operate with only one activity. This means that in order to assess the degree of alignment of a corporate with a given pathway, it is necessary to have defined pathways for several activities, with a methodology to aggregate them at corporate level, consistent with a global pathway calculation. For instance, a civil works company will carry out work and possibly own assets in diverse sectors such as water, electricity generation, transport, etc. Multinational enterprises bring additional complexity, as they operate in various countries. They need to consider pathways not only in different sectors but also in various countries. The exercise can become quite complex and even impossible to carry out, for methodological and/or data availability reasons.

In practice, most definitions, when they use a pathway (which can vary significantly by country) refer to a straight declining line. For example, the EC and CBI use a pathway to zero carbon in 2050 and refers to a straight declining line for the sectors’ emissions (although sectors have different targets, as noted above). Country and sector pathways will however be very different depending on starting conditions, so that this apparent convergence and simplicity may disguise the complexities noted in the preceding discussion. Even if several countries aim to put themselves on such a pathway, and incorporate the pathway in their national taxonomies, there are still a range of considerations and assumptions in translating the pathway to the taxonomy that may lead to (perhaps inevitable) differences in corporate-level thresholds among different taxonomies.

Based on the OECD contribution to the TEG, the EU taxonomy incorporates the notion of a systems approach to economic activities. As stated on page 42 of the EU TEG interim report (EUTEG, 2019[5]) “An economic activity cannot truly be considered sustainable independently from the wider system in which it operates. For example, the emissions reductions enabled by an electric vehicle depend a number of factors: charging from low-carbon electricity sources, not adding to congested traffic conditions and whether, at the end-of-life stage, the battery is reused or recycled in an environmentally sustainable way. Similarly, the well-being of people in cities does not just depend on the availability of low-emissions residential housing for example, but necessitates access to low-emissions transport options to ensure access to places of work and other vital services (shops, health facilities, etc.) or urban planning that lessens the need for vehicles . […..] The taxonomy development approach has therefore aimed to identify activities that make a substantial contribution on their own but also enable the overall transition of critical systems such as the energy, transport, urban, water and food systems. However, the nature of the transition in each country or region is influenced by the evolution of the entire system, including local strategies and policies. A taxonomy-eligible activity may only contribute to an individual country or region's transition pathway when it is also coherent with the transition of the overall system of which the activity is a part.”

The EU taxonomy therefore acknowledges the usefulness of a systems approach. Awareness of systems issues by market actors and policymakers, for example, can and should lead to innovation, new thinking on eligibility criteria for certain activities, and updated criteria. In practice, the concept has been partially operationalised notably in the setting of Do No Significant Harm criteria for certain activities. For example, the DNSH criterion for the manufacture of hydrogen reads: “The main potential significant harm to other environmental objectives from the manufacture of hydrogen is, in practical terms, inseparable from the potential for significant harm created by the hydrocarbon refining activity more generally. It is associated with polluting emissions to air; water used for cooling might lead to local resource depletion, dependent of the local scarcity of water resources; and the generation of wastes.” (EUTEG, 2020, p. 181[6]).

Further operationalising efforts of a systems approach may need to consider how to provide further and more granular guidance to taxonomy users who are non-experts in systems approaches, and likely will have varying interpretations. Other taxonomies and definitions reviewed in this report do not appear to incorporate a systems approach, even at the high level reflected in the EC taxonomy.

A desirable feature of a sustainable finance taxonomy is that it does not lag behind market innovation, or changes in available knowledge. A taxonomy should be able to adapt to the appearance of new technologies and to the start of the art of climate and environmental science. Consequently, a challenge of designing a taxonomy is the need to ensure sufficiently frequent updates to minimise any lag behind market innovation. As important new innovations and technology developments emerge, it will be important that the taxonomy will be responsive and evolve accordingly.

It can be argued that the absence of a mandatory or government-endorsed taxonomy enables innovation in the market. Unencumbered by taxonomies, which in practice cannot be updated constantly, new projects can push the boundaries of our current understanding of best practices in green buildings, for example. On the other hand, in a market without a government-endorsed taxonomy or other broadly recognised standard, innovations may remain relatively hidden to many market participants, given the myriad of different voluntary eligibility criteria being applied by different actors in the market. Moreover, such innovations could come with a trade-off; a proliferation of voluntary criteria also enables relatively weak thresholds (and green washing) to remain relatively hidden.

To help ensure the EU taxonomy is an adaptable framework, the TEG intermediary report (EUTEG, 2019[5]) states: “The taxonomy thresholds must be updated, with the phasing out of some included activities until specific points in time, as well as adaptation to the latest technological developments and innovation.” (p 186). The legislation includes a three-year revision clause for the activities and thresholds included. In addition, the EC intends to set up a platform where corporates and financial market participants will be able to advise on innovation requiring update of the activities and thresholds.

Setting ambitious thresholds in a taxonomy framework can itself spur innovation, by inciting corporates to better their environmental performance to match the threshold. For example, the EU taxonomy uses the EU-Emissions Trading System’s (EU-ETS) direct emissions benchmarks as a threshold for determining substantial contribution for mitigation in the primary aluminium production sector. The EU-ETS benchmark corresponds to the average emissions of the 10% most greenhouse gas efficient installations in a given sector included in the EU-ETS system. As of June 2019, the value of the threshold is 1.514 CO2e/t. The EU taxonomy threshold will automatically adjust in line with adjustments in the benchmark.

In ongoing work on the theme of “climate change mitigation through a well-being lens”, the OECD is considering interactions between climate mitigation and other policy objectives. “Adopting a well-being lens means ensuring that decisions aim to deliver simultaneously on multiple well-being objectives, including climate. It also requires an economy-wide perspective, rather than focusing on a single or very narrow range of output-related objectives, independently of others. For example, tackling damaging air pollution problems by eliminating fossil-fuel combustion takes advantage of one of the major synergies between climate action and health. In terms of trade-offs, addressing in advance the potential impacts on the affordability of transport from increased fuel prices through targeted compensatory measures or investments in public transport infrastructure, makes such price increases more acceptable and effective”. (OECD, 2019, p. 2[7])

Because taxonomies can integrate a systems approach, and more generally can be designed in a number of ways, they can also take into account broader well-being objectives. These include environmental as well as social issues. Depending on policy-makers’ priorities for sustainable finance, taxonomies have the potential to embrace a multiplicity of dimensions. For example, by interlinking six environmental objectives with the substantial contribution/do no significant harm approach, the EU taxonomy achieves a multiple dimension approach in its design. As outlined in section 1.1.1 above, the EU taxonomy includes a social dimension in sustainability. It requires eligible activities to comply with minimum social safeguards (the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the International Labour Organisation’s (‘ILO’) declaration on Fundamental Rights and Principles at Work, the eight ILO core conventions and the International Bill of Human Rights).

In sum, sustainable finance classification systems can embed in their design a pathways and systems approach, and integrate multiple objectives to pursue different inter-related dimensions of sustainability. The EU taxonomy is a pioneering effort to implement an integrated approach. Other definitions considered in this report currently focus on a single objective.

The introduction of government-sponsored sustainable finance definitions and taxonomies may significantly increase demand for data from issuers and investors in order to check eligibility of activities and/or investments.

The taxonomies and definitions reviewed in this report require users to provide or obtain data to prove compliance with the required metrics. In some cases, e.g. for green bonds, the data needs to be provided by issuers. In other cases, like the French GreenFin label, the data is to be provided by asset managers, who can obtain it from corporates but also get it from data providers, who provide their own calculations based on data and metrics provided by corporates.

In the case of the draft EU taxonomy, the level of data required from issuers or corporates is still to be detailed in the forthcoming delegated acts accompanying the taxonomy legislation. Most of the DNSH criteria for mitigation are requirements in existing EU environmental law. Many issuers, particularly smaller ones, are therefore said to be complying “by default” with this extensive range of legislation; however, this assumes a meaningful level of compliance assessment and enforcement, which often may not be the case. In addition, issuers may not have the data infrastructure in place to demonstrate compliance if necessary. It is therefore likely that data will be missing. In an initial user test case developed inside the TEG, about one third of companies in the sample portfolio could not be assessed because the necessary data was not available.

The issue of data availability is central to the uptake of taxonomies and sustainable finance definitions. In the same way that there are many different definitions of green finance, there is also a variety of methodologies for reporting certain metrics, such as carbon emissions. It is not only the scope (1, 2 or 3) of emissions that varies across reporting schemes, but also the consolidation scope within a group of companies. Some groups use the same scope as for International Financial Reporting Standards (IFRS) or US Generally Accepted Accounting Principles (GAAP) accounting to compute emissions at group level, while others use an ad-hoc perimeter. There are also various standards for counting emissions over time in the life cycle of a project. Because of this, it is difficult for investors to compare between reported emissions, or to add up corporate emissions at a portfolio level. For instance, the French securities market regulator Autorité des Marchés Financiers (AMF) issued a report in November 2019 on the social, societal and environmental disclosures of corporates listed in France (AMF, 2019[8]). It found that “While a good level of comparability between companies in the same sector is to be expected, key performance indicators are generally difficult to compare from one company to another. This is because the methodologies used and the choices made in the use of these methodologies (emission factor, calculation method, etc.) differ. Similarly, indicators are not always accompanied by sufficient explanations to allow the quality and scope of the information to be assessed.” Thus, even when data is available, it may be that it cannot be aggregated between the different economic activities of a given company, or between the different companies in the portfolio of an investment fund.

Further developments in the EU taxonomy are likely to require data on environmental objectives such as pollution, water and biodiversity protection and waste and recycling. Given that this data is not generally available to corporates now, there are questions as to whether they will make the effort to provide the data or simply opt to use a voluntary market-based taxonomy framework instead. It may be that European regulators will push for more corporate disclosures in the future, notably via revisions to the Non-Financial Reporting Directive expected in 2020. It remains to be seen at which pace an ecosystem of environmental sustainability data, consistent, comparable and that can be aggregated, will develop, and what will be the respective roles of corporates and data providers in this development.

The inclusion of metrics and thresholds for taxonomy eligibility in legislation points to the need for verification of the statements of compliance made by financial market participants and/or corporates. For private labels, such as the Climate Bond Standard and Certification Scheme (Climate Bonds Initiative), a system of verification by private consultants, called second opinion providers, has been developed. In the EU, the TEG recommended the future creation of an EU Green Bond Standard, and the creation of a platform of second opinion verifiers that would need to receive an accreditation from the EC. As regards the EU taxonomy, the process for verification is not addressed in the current legislation, so questions remain regarding this aspect of implementation. In other schemes such as the Dutch green bonds scheme, public authorities are responsible for verifying the green credentials submitted by borrowers and given by banks.

One of the stated objectives of official definitions of sustainable finance, for example in the EU and Japan, is to limit the risk of green- or impact washing, i.e. the misleading claim that a given investment has environmental and/or social benefits. The existence of official standards and definitions will not guarantee against greenwashing in itself, because financial market participants or corporates could report compliance inaccurately. This could result from intentional wrongdoing, for instance to claim the benefits of incentives on sustainable finance products. This could also result from unintentional mistakes, particularly at a time when indicators are still new and not familiar to their users. Therefore, the quality of the verification process of a taxonomy will be particularly important to reduce the risk of green- and impact washing, and thereby to provide confidence that will enable market growth.

Some of the potential benefits of well-designed sustainable finance definitions and taxonomies are mentioned below. In certain jurisdictions where definitions or taxonomies exist, it is perhaps possible to measure some of those benefits with appropriate indicators. This has not been attempted within the scope of the present research, but could be examined as part of future work.

More precise and consistent definitions of which investments are “green” and “sustainable” could facilitate the mobilisation and reallocation of financial capital towards those green and sustainable investments. It could give confidence and assurance to investors that they know what they are investing in, and know that their investments will be recognised as green or sustainable. Increased market clarity can in turn result in cost savings, by reducing due diligence costs. Once widely known, a green finance definition could reduce the time and effort involved in understanding and evaluating a greenness assessment methodology. More clarity may also help ease the flow of capital towards sustainability objectives. On the issuer side, greater clarity in definitions could provide greater assurance that investors will invest in the product and not hesitate due to questions about the acceptability of the definition reflected in the product. Price discovery may also be easier, as products using the same definition should be more comparable. On the investor side, definitions could make the tagging of investment products easier, and therefore increase the likelihood that an investor will express an appetite for a green investment.

The fear of “green” or “impact washing” may be hindering the mobilisation of capital towards green and sustainable assets. Common standards and issuing principles are essential for growing bond markets and preventing “greenwashing” scandals that would damage the reputation of bond issuers and investors alike (Inderst, Kaminker and Stewart, 2012[9]) (Kaminker et al., 2013[10]) (OECD, 2015, p. 47[7]). The strength of a taxonomy’s verification processes are therefore crucial to avoiding the risk of green and impact washing. Concerning the EU Taxonomy, the regulation does not contain details of the verification procedures, which may be clarified in the future. As far as green bonds are concerned, external review and certification costs seem to have come down over time, as the market was growing. A similar evolution for sustainable finance taxonomies would be desirable.

A general aim of sustainable finance definitions is to attract capital to investment objectives. Sustainable investment opportunities will depend on their risk-return profile, which is affected by such considerations as the current state of regulation and policies, such as carbon pricing. The availability of finance at the right cost plays a role, but may not suffice to shift capital towards a sustainable economy if other sustainability policies are not implemented. In this context, there could be a danger that the development of sustainable finance products creates a demand for sustainable assets, while the supply of such assets stalls due to insufficiently ambitious policies. In such a situation, increased demand for a non-increasing quantity of assets could create a price bubble. In turn, the inflation of sustainable asset prices could increase the cost of acquiring green assets for financial market participants or corporates wanting to increase their share of sustainable assets, and thereby increase the cost of the transition to a more sustainable economy.

In order to reduce such risks, policy-makers could consider how potential market growth in response to taxonomy development would match up against emerging supply of sustainability projects and assets, and aim to develop stronger targets, policies and implementation in parallel with the development and implementation of taxonomies. Taxonomies have the potential to be a powerful toolkit but they are complementary to, and not a substitute for, the need for strategic planning, good policies and regulations.

References

[4] Allen, M. et al. (2018), Drafting Authors: Summary for Policymakers SPM, https://www.ipcc.ch/site/assets/uploads/sites/2/2019/05/SR15_SPM_version_report_LR.pdf.

[8] AMF (2019), REPORT ON THE SOCIAL, SOCIETAL AND ENVIRONMENTAL RESPONSIBILITY OF LISTED COMPANIES amf-france.org, https://www.amf-france.org/en_US/Publications/Rapports-etudes-et-analyses/Gouvernement-d-entreprise?docId=workspace%3A%2F%2FSpacesStore%2F61824ca2-b735-455c-b23d-6132d5ce4fed.

[3] EuropeanCommission (2019), Sustainable finance: Commission publishes guidelines to improve how firms report climate-related information and welcomes three new important reports on climate finance by leading experts, https://ec.europa.eu/commission/presscorner/detail/en/IP_19_3034.

[1] EuropeanCommission (2018), EC Regulation on the establishment of a framework to facilitate sustainable investment, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52018PC0353&from=EN.

[6] EUTEG (2020), https://ec.europa.eu/info/sites/info/files/business_economy_euro/banking_and_finance/documents/200309-sustainable-finance-teg-final-report-taxonomy-annexes_en.pdf.

[5] EUTEG (2019), EU TEG Taxonomy Technical Report, https://ec.europa.eu/info/sites/info/files/business_economy_euro/banking_and_finance/documents/190618-sustainable-finance-teg-report-taxonomy_en.pdf.

[2] Harvey Nash (n.d.), UK Boards Ignore Climate Change, 2019, https://www.harveynash.com/group/mediacentre/2019/12/uk_boards_ignore_climate_change/index.asp.

[9] Inderst, G., C. Kaminker and F. Stewart (2012), “Defining and Measuring Green Investments: Implications for Institutional Investors’ Asset Allocations”, OECD Working Papers on Finance, Insurance and Private Pensions, No. 24, OECD Publishing, Paris, https://dx.doi.org/10.1787/5k9312twnn44-en.

[10] Kaminker, C. et al. (2013), “Institutional Investors and Green Infrastructure Investments: Selected Case Studies”, OECD Working Papers on Finance, Insurance and Private Pensions, No. 35, OECD Publishing, Paris, https://dx.doi.org/10.1787/5k3xr8k6jb0n-en.

[7] OECD (2019), In Brief Increasing incentives for climate action using a well-being lens, https://doi.org/10.1787/2f4c8c9a-en.

Note

← 1. Further discussion of issues regarding data availability and verification is provided in section 3.3 below.

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