The International Finance Corporation (IFC), part of the World Bank Group, has called for urgent standardisation of green bond definitions to attract the estimated $2.4 trillion annually needed to support the global green transition. The IFC’s appeal comes as sustainable investments face potential headwinds under the incoming Trump administration.
Green bonds have emerged as a key financial tool to fund climate-friendly projects, but the proliferation of taxonomies—classification systems defining what qualifies as “green”—is creating confusion for investors. Alfonso Garcia Mora, IFC Vice President for Europe, Latin America, and the Caribbean, warned that fragmented definitions could hinder the flow of capital into sustainable projects.
“Currently, there are over 30 green taxonomies globally,” Mora stated at the Invisso Central & Eastern European Forum in Vienna. “This makes it difficult for investors to allocate capital effectively when the criteria vary so widely. Greater coordination is essential.”
As one of the largest issuers of green debt, the IFC has raised nearly $14 billion through 207 green bonds in 21 currencies since 2010. Despite these achievements, Mora highlighted the need for harmonised frameworks to enhance investor confidence and accelerate funding for the green transition.
The push for standardisation is critical as the global green bond market navigates challenges, including anticipated political scrutiny of environmental, social, and governance (ESG) policies under the Trump administration.
Mora emphasised that the lack of uniformity in green bond definitions is a major obstacle. “If financial markets operate with different taxonomies, we face a significant problem,” he said. “Globally accepted definitions are vital to bridge the gap between investor needs and the funding required for climate goals.”
