The Climate Bonds Initiative has released Taxonomy 101, a comprehensive guide designed to help governments, regulators and market participants develop credible and interoperable sustainable finance taxonomies. The publication comes at a time when more than 60 taxonomies are in place or under development worldwide, highlighting both the rapid expansion of the market and the growing need for clarity and consistency.
Taxonomies underpin the sustainable finance ecosystem by providing clear definitions for activities and investments that contribute to climate and environmental goals. They help link national priorities with international commitments, ensuring capital is directed towards projects that genuinely support a low-carbon and climate-resilient economy.
With the proliferation of taxonomies globally, the issue of interoperability has become increasingly significant. Although taxonomies may differ across jurisdictions, interoperability ensures they remain comparable, grounded in shared scientific principles—particularly those aligned with the Paris Agreement.
Taxonomy 101 offers practical guidance on achieving this balance, drawing on more than a decade of technical experience at Climate Bonds. The guide sets out recommendations across four phases of taxonomy development—governance, design, implementation, and expansion and revision. It emphasises the importance of inclusive governance structures, science-based thresholds, collaboration between regulators and industry, and periodic updates to reflect new technologies and evolving transition pathways.
The publication provides detailed direction on setting objectives, integrating taxonomies into disclosure and financial product frameworks, and managing ongoing revisions to maintain credibility and relevance. It is designed for practitioners at all stages of taxonomy development and implementation, and serves as an accessible resource for policymakers, financial institutions, and non-financial organisations seeking to better understand taxonomy applications.
Taxonomy 101 also complements recent global efforts to enhance alignment among sustainable finance frameworks. It builds on Climate Bonds’ experience supporting governments and institutions across Latin America, Europe, Africa, Asia and the Pacific, and aligns with tools released during Pre-COP and COP30, including the new Principles for Taxonomy Interoperability under the Taxonomy Roadmap Initiative.
As countries move from climate pledges to investment planning, robust and science-based taxonomies are becoming essential. By offering a clear blueprint for development and harmonisation, Taxonomy 101 aims to support more credible market practices and ensure capital is steered towards activities that deliver measurable climate impact.
