The Central Bank of Sri Lanka launched the Sri Lanka Green Finance Taxonomy at the John Exeter International Conference Hall of the Central Bank on May 6, 2022.
The Sri Lanka Green Finance Taxonomy is a classification system, which defines and categorizes environmentally sustainable economic activities, and is a key action item outlined in the Roadmap for Sustainable Finance of Sri Lanka introduced by the Central Bank in 2019. The Taxonomy has been prepared in line with the international best practices while harmonizing for local context, hence it is expected to enable financial market participants to raise low-cost funding for green activities through both domestic and foreign markets.
Delivering the keynote address of the launch, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe highlighted the importance of promoting and developing a holistic strategy to integrate sustainability into the country’s financial system, particularly in the context of the current economic challenges faced by the country and during the recovery in the aftermath of the COVID–19 pandemic.
The Governor also highlighted the fact that the Sri Lanka Green Finance Taxonomy would be a critical tool to guide financial institutions, investors, corporate, and green-bond issuers to navigate the transition to a low-carbon, climate-resilient, and resource-efficient economy.
The Sri Lanka Green Finance Taxonomy would apply to all domestic and foreign market participants offering financial products (such as bank lending, debt instruments, portfolio management, and investment funds), large corporations, as well as national and local government bodies.
It can also be used as a reference by the industrial planning authorities and served as the basis for local governments to support green industries covering a range of economic activities such as forest and logging, agriculture, manufacturing, electric power generation, transmission and distribution, gas, steam and air conditioning supply, water supply, sewerage and waste management, construction, transportation and storage, financial services and tourism and recreation.
The launch was attended by IFC Country Manager for Sri Lanka and the Maldives Lisa Kaestner and the officials of the IFC, secretaries of ministries and senior officials of government institutions, international and local experts, representatives of international institutions and partner agencies, representatives of financial institutions, and the officials of the Central Bank.
The Sri Lanka Green Finance Taxonomy was developed with the technical and financial assistance of the International Finance Corporation (IFC).