Finance is an essential enabler for the transition to a net zero circular economy. Despite growing recognition of the important role of finance, the stark reality is that investment in sustainable economic activities remains far below the necessary level to deliver a transition within a suitable timeframe. It is increasingly recognized that more needs to be done to redirect the flow of capital.
Green financial taxonomies offer a promising tool with which to do this. A green finance taxonomy provides a common classification system for identifying activities, assets and project categories that deliver on key climate, green, social or sustainable objectives with reference to identified thresholds or targets.
As both the European Union (EU) and UK Green Taxonomies are under development there is an opportunity to share learning and expertise from both parties of stakeholders with the aims of effectively embedding the circular economy within a taxonomy and identifying areas for harmonization and potential divergence – harmonization being particularly important given the interconnectedness between the two markets.
In September, the EU is conducting an open consultation on circular economy technical screening criteria and the UK Green Technical Advisory Group is finalizing its initial recommendations to the government on a UK taxonomy.
This event, co-hosted by Chatham House and E3G, explores the development of taxonomies globally, with a particular focus on their circular economy elements, as well as the status of the EU and UK taxonomies including lessons that can be learned from the EU experience, dynamics at the global level regarding the creation of a common framework for existing taxonomies and their role in accelerating the circular transition.
The event is funded by the Laudes Foundation.
