Defining Climate-Aligned Investment: An Analysis of Sustainable Finance Taxonomy Development

Tripathy, Aneil and Mok, Lionel and House, Katie, Defining Climate-Aligned Investment: An Analysis of Sustainable Finance Taxonomy Development (September 2, 2020). The Journal of Environmental Investing 10(1), Available at http://www.thejei.com/journal/.

17 Pages Posted: 10 Nov 2020

See all articles by Aneil Tripathy

Aneil Tripathy

University of Bologna

Lionel Mok

Hong Kong University of Science & Technology (HKUST)

Katie House

CLIMATE BONDS INITIATIVE

Date Written: September 2, 2020

Abstract

The green bond market has grown rapidly since its inception in 2007. Climate-aligned standards provide investors with the confidence that their investments deliver a measurable climate benefit. Serving as a benchmark, these standards demonstrate alignment with the Paris Agreement, against which green bond issuers can then report compliance. This paper draws on the authors’ experiences as practitioners and researchers helping to develop the Climate Bonds Standard and the European Union’s Sustainable Finance Taxonomy to analyze the methodological considerations that were vital to the development of both taxonomy systems. The first section positions the role of standards development within the context of the green bond market and is followed by an analysis of the factors that affect the Climate Bonds Standard criteria development process. This paper concludes with key takeaways and suggestions for areas of future research on climate-aligned standards development.

Keywords: climate-aligned, taxonomy, scalability, standards

JEL Classification: G3, O16, Q01, Q2, Q3, Q4, Q54, Q56, Z23, Z1, Z18

Suggested Citation

Tripathy, Aneil and Mok, Lionel and House, Katie, Defining Climate-Aligned Investment: An Analysis of Sustainable Finance Taxonomy Development (September 2, 2020). Tripathy, Aneil and Mok, Lionel and House, Katie, Defining Climate-Aligned Investment: An Analysis of Sustainable Finance Taxonomy Development (September 2, 2020). The Journal of Environmental Investing 10(1), Available at http://www.thejei.com/journal/., Available at SSRN: https://ssrn.com/abstract=3684926

Aneil Tripathy (Contact Author)

University of Bologna ( email )

Bologna
Italy

Lionel Mok

Hong Kong University of Science & Technology (HKUST) ( email )

Kowloon
Hong Kong

Katie House

CLIMATE BONDS INITIATIVE ( email )

40 Bermondsey Street
London
London, AL Alabama SE1
United Kingdom

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