06/05/2022

The world has acknowledged the importance of incorporating environmental, social and governance issues into decision making process by financial system as a significant contributor to sustainable development. The National Bank of Georgia supports strengthening the role of the financial sector in sustainable development of the country and for this purpose develops a framework for green, social and sustainable finance. This framework implies consideration of social and environmental issues by financial sector and capital market participants and managing risks associated with them, which is important for financial stability and sustainable development of the economy.

In line with mentioned framework at the end of April 2022 NBG has published  the Sustainable Finance (SF) Taxonomy draft. 

The SF Taxonomy provides a classification system for identifying activities that deliver on key climate, green, social, or sustainability objectives.

The need for developing a taxonomy for Georgia stems from various reasons. The lack of common definitions and classification systems has been cited as one of the main challenges for sustainable finance development. Apart from that, having a common taxonomy facilitates proper identification, assessment, and management of sustainability risks at both individual entity and system-wide levels and reduces the risk of greenwashing.

The SF Taxonomy adopts a broad perspective when defining the sustainable finance and thus, in addition to green finance, it also includes social finance. Green taxonomy provides a list of activities that aim to achieve environmental objectives and contribute to the development of a green economy. Social taxonomy, on the other hand, proposes a list of categories focused on achieving social objectives primarily but not exclusively for the target population.

The SF Taxonomy was developed by the National Bank in collaboration with local and international experts and stakeholders. Taxonomy categories and corresponding technical criteria are developed in accordance with the best international practice, while the characteristics of the Georgian economy are also well-integrated. All this contributes to the usability of the taxonomy and guarantees its credibility both locally and internationally.

Given the broad applicability of the SF Taxonomy and the high public interest, the NBG publishes the SF Taxonomy draft for the public consultation. The NBG welcomes interested parties' suggestions and comments.

The SF Taxonomy draft is available at the following address - Sustainable Financing Taxonomy