More Stories

Informist, Tuesday, Mar. 18, 2025

 

--Source: Govt ready with concept paper on taxonomy for climate finance

--Source: Govt to seek public view on draft climate fin taxonomy this month

--Source: Govt may release framework for climate finance taxonomy by Sept

--CONTEXT: Minister Sitharaman had announced climate finance taxonomy in Jul

 

By Kuldeep Singh and Krity Ambey

 

NEW DELHI – Taking a step towards developing India's fledgling climate finance sector, the finance ministry is likely to seek public feedback on a draft taxonomy for climate finance this month, a senior ministry official said. The ministry will then aim to incorporate the suggestions and develop the final framework within the next six months, the official added. 

 

"We formed committees in various sectors to hold discussion on taxonomy for climate finance," the official said. "We are ready with a concept paper and should be able to finalise everything in the next six months."

 

Finance Minister Nirmala Sitharaman had in July announced that the government would formulate a taxonomy for climate finance to enhance the availability of capital for climate adaptation and mitigation. The government had also held a workshop on India's green transition plan in January, during which officials from various government departments had discussed taxonomy for climate finance.    

 

Climate finance taxonomy is a classification system that defines and categorises economic activities based on their environmental impact, particularly in relation to climate change. It provides a framework for investors, financial institutions, and governments to identify and support activities that contribute to a low-carbon economy, while avoiding those that harm the environment. It helps ensure that funds for climate financing flow necessarily towards climate-friendly initiatives.

 

India is among 50 countries that are actively engaged in developing or have already developed climate finance taxonomies. The European Union, Canada, and South Korea have already developed such a taxonomy. Among emerging economies, China, Thailand, Indonesia, and Vietnam are some of the early movers on the taxonomy.

 

Officials currently drafting the climate taxonomy have studied taxonomies of some of the developed economies which may serve as reference for India, the finance ministry official said. "But we cannot follow exactly those. We want to develop an India-focussed taxonomy," the official added. "What is relevant for the developed economies may not work for us." 

 

Taxonomy for climate finance is expected to support India in achieving its climate commitments and green transition, Sitharaman had said while proposing the taxonomy. India has set an ambitious target to achieve net-zero emissions by 2070. The commitment is aligned with the Paris Agreement's goal to limit global warming to 1.5°C above pre-industrial levels. In the near term, India has pledged to reduce its greenhouse gas emissions intensity by 45% by 2030, relative to 2005 levels.  End

 

 

Edited by Tanima Banerjee

 

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.