Legal & Regulatory News

Network for Greening the Financial System publishes report on enhancing market transparency in green and transition finance

27 April 2022

On 27 April 2022, the Network for Greening the Financial System (the NGFS) published a report on 'Enhancing Market Transparency in Green and Transition Finance' (the Report). The main areas explored in the Report are taxonomies; green external review and assessment; and climate transition metrics, frameworks and market products.

The Report is intended to feed into international discussions, including those of the G20 Sustainable Finance Working Group, on improving the compatibility of approaches to identifying, verifying and aligning investments with sustainability goals. The Report sets out three sets of common and general observations relevant to policymakers policymakers:

  1. Enhance market transparency surrounding green and transition objectives.
  2. Facilitate comparability and interoperability of taxonomies, frameworks and principles.
  3. Redouble future efforts on disclosure and reporting.

The third of these observations picks up a recurring theme in the Report, which emphasises that globally consistent baseline disclosure standards, together with industry specific activity metrics, are imperative. In order to provide financing for transition, there is a need for clear and internationally comparable criteria, allowing issuers and investors to weigh up the environmental impacts of their investments.

Click here to access the Report.