In the rapidly evolving landscape of sustainable finance, the lack of a unified global taxonomy poses significant challenges, as highlighted by Christian Kroll, professor of sustainability at IU International University of Applied Sciences.
With 26 different sustainable finance taxonomy frameworks currently being developed or adopted worldwide, the risk of a fragmented system is greater than ever. This diversity not only leads to confusion over what truly constitutes a sustainable activity but also opens up avenues for greenwashing.
Christian Kroll argues that an international body like the UN should spearhead the creation of a universal taxonomy rooted in scientific standards and legal binding, which could streamline cross-border investments and provide a clear benchmark for sustainability claims.
By establishing consistent sustainability criteria worldwide, it would incentivise companies to innovate, thereby creating jobs in green industries and contributing to global economic stability. Moreover, it would align with international climate goals and ensure that all countries work towards common environmental standards.
Read more here: https://www.sustainableviews.com/the-case-for-a-global-taxonomy-for-sustainability-4f91068d/
