35 years: Capital markets editorial
In this video, Keith discusses the growing concerns around the proliferation of diverse and divergent taxonomies, which are leading to fragmentation and taxonomy competition. There are fears that multiple verification processes will lead to higher issuing costs and lower issuer and investor confidence. However, international organisations such as the IPSF and the G20's Sustainable Finance Working Group are working towards international alignment and co-ordination to minimise risks and ensure transparency in the sustainable finance market.
In this video, Keith discusses the growing concerns around the proliferation of diverse and divergent taxonomies, which are leading to fragmentation and taxonomy competition. There are fears that multiple verification processes will lead to higher issuing costs and lower issuer and investor confidence. However, international organisations such as the IPSF and the G20's Sustainable Finance Working Group are working towards international alignment and co-ordination to minimise risks and ensure transparency in the sustainable finance market.
4 mins 34 secs
Fragmentation of taxonomies is emerging as a problem due to the different angles and speeds that countries are approaching them with. This is causing issues with competition and inconsistent language, making it difficult for international companies and investors to comply with multiple standards. Some asset managers and owners are drafting their own taxonomies which may further complicate the situation. However, certain international organisations are working on alignment and standardisation to minimise fragmentation and ensure transparency and integrity of sustainable finance markets.
Key learning objectives:
Understand the issues with too many taxonomies
Outline some of the international organisations encouraging alignment and standardisation
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