India is shaking up the world of sustainable finance. In a time when record outflows have many questioning the value of sustainable funds, India is introducing a new climate taxonomy. Interestingly, the taxonomy will incorporate the Do No Significant Harm (DNSH) principle, first developed in the EU for use in the EU taxonomy. Responsible Investor writes:
“India is poised to introduce a climate taxonomy that will incorporate Do No Significant Harm (DNSH) hurdle requirements and support the transitioning of carbon-intensive sectors, according to a draft framework published by the Ministry of Finance… The proposed framework will initially focus on raising transition financing for three hard-to-abate sectors: iron, steel and cement. It will focus on supporting low-emissions production methods and developing ‘domestic expertise for a gradual transition to low-emission pathways.'”
The taxonomy is aligned with India’s 2070 net-zero target and is designed to avoid stranded assets by taking an incremental approach to implementation. The inclusion of the DNSH standard is another example of a country adopting requirements that have proven difficult to implement in the EU, similar to the Chinese use of double materiality in their forthcoming sustainability disclosure standards. This could point to a global increase in ESG appetite, contrasting the ebbing popularity of ESG in Europe and North America.
Our members can learn more about sustainable finance here.
If you aren’t already subscribed to our complimentary ESG blog, sign up here for daily updates delivered right to you.
DID YOU KNOW … we are much more than just blogs. Check out our range of resources and become a member today. Sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund. But it will probably pay for itself before then.
Are you a client of one of our Partners? Contact them for exclusive pricing packages for PracticalESG.
