Operationalising Sri Lanka’s Green Finance Taxonomy
Technical assistance for the Central Bank of Sri Lanka to support the taxonomy implementation
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Photo by Shaani Sewwandi
October 1, 2023
In 2022, the Central Bank of Sri Lanka (CBSL) introduced the “Sri Lanka Green Finance Taxonomy” as a pivotal component of the “Roadmap for Sustainable Finance in Sri Lanka”. This framework categorises economic activities as environmentally sustainable if they substantially contribute to Sri Lanka’s transition to a green economy.
While market participants have positively received the introduction of the taxonomy, they encounter challenges in effectively implementing and advancing their sustainability initiatives. This predicament is not uncommon, as taxonomies are relatively new, and countries worldwide are either in the development process or in the initial stages of adopting and implementing them.
What?
In order to support the operationalisation of Sri Lanka’s Green Finance Taxonomy, the CBSL has commenced a partnership with the EU Green Recovery Facility, a four-year intervention funded by the European Union (EU) and implemented by Expertise France (EF), which aims to design capacity-building programmes on the taxonomy and sustainable finance in general.
In this framework, Expertise France appointed Climate & Company and the national sustainable banking expert Adheesha Perera to consult Sri Lankan stakeholders to identify existing challenges and needs in relation to the operationalisation of the Green Finance Taxonomy and to formulate capacity building strategies that address them.
How?
The following activities have been part of this assignment:
- Conduct a taxonomy-relevant policy analysis that highlights the policy coherence and integration between selected sector policies/strategies and the taxonomy;
- Prepare a gap analysis based on stakeholder consultations that highlights the identified taxonomy implementation challenges and capacity needs of each stakeholder group;
- Deliver a half-day validation workshop with key stakeholders in order to present, discuss and validate the main findings of the gap analysis; and
- Develop the preliminary methodology of the capacity-building programmes that will address the identified implementation challenges and capacity needs of the consulted stakeholder groups.
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