SPI Journal, Spring 2022
Future of energy

Review of the month

Since the last edition of the SPI Journal, important strides have been made around the world in efforts to reach net zero.

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Key ESG policy decisions

JanuaryApril 2022

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Indonesia introduces green taxonomy
The Financial Services Authority (OJK) of Indonesia has introduced the Taksonomi Hijau Indonesia, a green taxonomy based on the Indonesia Standard Industrial Classification (KBLI). It focuses on sectors classified as green, but also includes those that are yet to be classified.

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South Korea announces K-Taxonomy
South Korea’s Financial Services Commission has announced the creation of a Korean green taxonomy. It will consist of a green sector, contributing to carbon neutrality and environmental improvement, and transitional sector, necessary for the transition to carbon neutrality. LNG investments have been temporarily classified until 2035.

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China reforms legal environmental disclosure system
China’s Ministry of Ecology and Environment has introduced legislation requiring companies and issuers who received environmental penalties to disclose information relating to environmental protection, carbon emissions and the climate/ecological protection of the projects they financed.

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Singapore plans to issue first green bond
As part of a $26bn plan to improve climate-focused investment by 2030, Singapore has announced plans to introduce its first green sovereign bond. This is an increase on last year’s plans to raise $19bn in green debt to finance projects.

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India aims to launch sovereign green bond
India will issue green bonds to fund sustainable infrastructure development. The investment will focus on public sector projects that will reduce the carbon intensity of the economy.

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Saudi Arabia’s sovereign fund lays out green finance framework
In February, PIF, Saudi Arabia’s sovereign fund, published its green finance framework. It is aligned with the International Capital Markets Association and Loan Markets Association’s Green Bond Principles, set out in four key components: use of proceeds, process for project evaluation and selection, management of proceeds and reporting.

Further reading

Selected reports on climate change and sustainable finance, January–April 2022.

Bank for International Settlements – Deconstructing ESG scores: how to invest with your own criteria

This working paper sets out an investment strategy based on deconstructing ESG scores. This helps investors to track the sustainability performance of their portfolio against their sustainable investment objectives.

Network for Greening the Financial System – Central banking and supervision in the biosphere: an agenda for action on biodiversity loss, financial risk and system stability

The final report of the NGFS-INSPIRE study group on biodiversity and financial stability analyses different approaches to the design of nature-related scenarios. It also considers gaps in knowledge, sets out a research agenda, identifies near-term policy options and makes recommendations for action by central bankers and supervisors on biodiversity loss.

World Bank – Consolidating the Recovery: Seizing Green Growth Opportunities

This paper tracks the progress of Latin American and the Caribbean’s recovery from Covid-19. It looks at how placing the region’s ability to adapt and innovate at the centre of both the growth and greening agendas can create synergies between them.

International Panel on Climate Change – Sixth Assessment Report: Mitigation of Climate Change

The report provides an updated global assessment of climate change mitigation progress and pledges and examines the sources of global emissions. It explains developments in emission reduction and mitigation efforts, assessing the impact of national climate pledges in relation to long-term emissions goals.

United Nations Environment Programme – The State of Finance for Nature in the G20

This report calls for G20 countries to scale up annual nature-based solutions to tackle the climate crisis and provides recommendations for aligning the economic recovery with nature goals. It builds on the global report ‘State of Finance for Nature – Tripling Investments in Nature-Based Solutions by 2030’ released in 2021.