Tuesday 24 Dec 2024
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KUALA LUMPUR (Nov 10): The ASEAN Taxonomy Board (ATB) has released Version 1 of the ASEAN Taxonomy for Sustainable Finance, in conjunction with the 26th Conference of the Parties to the UN Framework Convention on Climate Change (COP26).

The ASEAN Taxonomy serves as a reference point to guide capital and funding across ASEAN for financing sustainable economic activities, the board said in a statement.

Version 1 provides a frame for discussions with official sector and private sector stakeholders to work together on the development of the ASEAN Taxonomy, it said.

"The ASEAN Taxonomy represents the collective commitment of ASEAN member states in transitioning towards a sustainable region," ATB said in a statement.

"It is designed to be an inclusive and credible classification system for sustainable activities and will be one of the key building blocks in attracting investments and financial flows into sustainable projects in the region," it added.

ATB said the taxonomy incorporates a multi-tiered approach with two main elements, namely a principles-based Foundation Framework which provides a qualitative assessment of activities, and a Plus Standard with metrics and thresholds to further qualify and benchmark eligible green activities and investments.

As a standard, the Plus Standard will cover six sectors that have most value add and also emissions-heavy, namely agriculture, forestry and fishing; electricity, gas, steam and air conditioning supply; manufacturing; transportation and storage; water supply, sewerage and waste management; and construction and real estate.

It also includes three sectors that contribute towards achieving environmental objectives, namely information and communication; professional, scientific and technical; and carbon capture, storage and utilisation.

The ASEAN Taxonomy also elaborates on the "stacked approach" that will be used to determine thresholds and technical screening criteria under the Plus Standard, which will be developed in the next phase, ATB said.

Edited ByTan Choe Choe
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