Beijing, June 5th - The SDG Finance Taxonomy (China) 2020 Edition (herein after referred to as the Taxonomy) was debuted today. Jointly initiated by UNDP China and the China International Center of Economic and Technical Exchanges (CICETE) of the Ministry of Commerce, the Taxonomy was developed as a public good to accelerate capital flows that advance the SDGs. It was co-created by Chinese national and international experts from various areas, including industry, finance, social development and research with several rounds of multi-lateral consultation. The Taxonomy enables users to navigate SDG finance projects, and to inform and drive impact performance.
The Taxonomy uses SDGs as a common language to assist investors and project developers in structuring their investment and business strategies in an SDG-aligned manner, and measuring and managing the impact of investment and financing activities in terms of the SDGs.
The 2030 Agenda for Sustainable Development, announced in 2015, is an ambitious call to action to reconnect the economy with society, decouple the economy from environmental consequences and leave no one behind. To achieve the goals, the world is facing an annual funding gap of US$5 trillion to $7 trillion, which cannot be closed by the endeavors of governments and development organizations alone. It has to be done through mobilizing private sector engagement and directing all kinds of capital towards sustainable development. Although the SDG financing ecosystem is expanding, a unified definition of SDG-enabling financing is still absent in the world, including China. This has affected the accurate identification of economically viable financing or economic activities for sustainable development.
The Taxonomy pushes the horizon of sustainable development beyond climate change mitigation, adaptation and environmental protection. It puts a special focus on improving access to socioeconomic empowerment and supporting vulnerable groups. The Taxonomy urges action to benefit people living below the poverty line, people living in underserved areas, the vulnerable, the unemployed/underemployed, and the undereducated. China is shifting towards growth that promotes high quality development. It is now accelerating the SDGs, making significant progress in innovation, as well as fighting poverty and pollution. China has one of the largest shares of SDG business opportunities and markets, and plays an increasingly influential role in the global arena. Consequently, we are testing this Taxonomy in China, first. The Taxonomy has been developed specifically for China’s context, while adopting global experiences. It also balances the sustainable development agenda with market motivations.
To ensure that the Taxonomy is widely used and accepted, UNDP, as the convener, will continue to engage industrial and investment professionals to pilot it in China; test the feasibility of replicating it in other countries and regions; adjust the Taxonomy’s coverage to ensure an innovative and forward-looking perspective; and mainstream SDG finance initiatives and advocate necessary incentive mechanisms through policy dialogues and capacity buildings.
The Technical Report on the SDG Finance Taxonomy (China) [2020 edition] introduces and explains the development principle, process and progress of the Taxonomy in detail (click here to download the full report).
If you need to further explore the issues in this report, please contact Dr. Xu Qing (email@example.com), Programme Specialist SDGs finance, UNDP China.