How do we know if an investment is really sustainable?

06 Apr 2022

 

Sustainable Finance For Nature-based Solutions Digital Forum

 

On March 2022, the Luxembourg-GLF Finance for Nature platform hosted the Sustainable finance for NbS Digital Forum with the aim of bringing together practitioners, policymakers, and scientists to explore opportunities for NbS investments emerging from recent developments in carbon finance and sustainable finance regulations, as well as build dialogue to increase the adoption of good practices, and inform policy processes in this arena.

Along with a panel of experts, Ariel Brunner, senior head of policy at BirdLife Europe and Central Asia, breaks down the EU taxonomy, a science-based classification system, and a finance mechanism expected to become the global standard for determining whether an economic activity can be considered environmentally sustainable.

 

The EU taxonomy in a nutshell

 

The discussion explores the opportunities and challenges of creating a taxonomy and disclosure regulations, and the potential of other mechanisms to ensure sustainable value chains and greater investments in nature-based solutions:

 

  • The EU taxonomy is a classification system establishing a list of environmentally sustainable economic activities published by the EU in 2020.
  • There are different views on sustainable finance across different sectors. For some, it’s an opportunity to generate investment in the tropics, especially forest commodities. “We need integration of the forestry value chain,” says Anna Begemann from the European Forest Institute (EFI).
  • The EU taxonomy is not legally binding, it offers guidelines for channeling sustainable investment into more sustainable practices.
  • Integrating policy and science is key to achieving sustainable finance. The EU taxonomy has a strong scientific component in setting criteria for sustainable value chains across countries.

 

Learn How to mobilize funds for the planet 🌍


This video is focused on value chains in support of the work of the Food Systems, Land Use and Restoration Impact Program (FOLUR), with funding from the Global Environment Facility.