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[2022-July-14] WG2: Application of the Common Ground Taxonomy for Sustainable Finance in Belt and Road regions

On July 14th, the GIP organized the latest capacity building event on “New Common Ground Taxonomy for the Belt and Road Region”, in collaboration with the Belt and Road Bankers Roundtable (BRBR), which was co-hosted by Credit Agricole CIB and Industrial Bank. The webinar is the first online capacity building event of the GIP Working Group on Environmental Information Disclosure for the year and has attracted around 150 participants. 

In his opening speech, Dr. MA Jun, Director of the Green Finance Committee of China Society for Finance and Banking, Co-Chair of GIP Steering Committee and Co-Chair of IPSF Classification working group, introduced CGT's preparing background and potential application scenarios.

Ms. YIN Hong, Vice president of the Modern Finance Research Institute of ICBC, pointed out the significance of the Common Ground Taxonomy. Antoine ROSE, Director of Sustainable Development Banking for Asia Pacific at Crédit Agricole Bank, and CHEN Yaqin, Assistant General Manager of the Green Finance Department of Industrial Bank, respectively introduced the green bonds recently issued or underwritten based on the Common Ground Taxonomy.

Dr. WANG Bolu, a senior researcher at the National Institute of Finance, Tsinghua University, elaborated on the technical highlights and applications of the Common Ground Taxonomy, including six control scenarios of the China-Europe Green Finance Classification Catalogue.

Later, five experts from Europe and Asia had a discussion on the application of the Common Ground Taxonomy for green financing along the Belt and Road regions. Experts unanimously affirmed the significance of the Common Ground Taxonomy in promoting mutual recognition of different green standards and guiding investment and financing practices. From the perspective of investors, the Common Ground Taxonomy helps evaluate the "green degree" of assets. The existing cases show that sound financial performance and positive environmental impact can be achieved at the same time. From the perspective of issuers, the Common Ground Taxonomy can provide  enterprises reference to develop the internal green finance framework and carry out business approval. The economic activities defined by the Common Ground Taxonomy are in line with the activities supported by green financial instruments in the markets.

At the same time, the experts pointed out that the application of the Common Ground Taxonomy also needs to be guaranteed by other mechanisms, including improving the disclosure quality of proceeds use and environmental impact so as to enhance credibility and reduce risks.

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