Fiji will develop green taxonomy and ESG standards

Fiji will soon add its name to the list of countries that have a green taxonomy. The Reserve Bank of Fiji (RBF) and the International Finance Corporation (IFC) will work together to develop guidelines that clearly define green assets, the two announced at the end of September.

The taxonomy, created with support from the Australian government, is expected to help pave the way for more investment in green projects in Fiji.

“A well-defined and structured Fijian taxonomy will enable the financial sector to channel private sector capital towards climate-related projects, which will contribute to achieving national environmental objectives,” RBF governor Ariff Ali said in a press release.

The IFC will also help the central bank integrate ESG standards into its financial market operations, and encourage businesses and financial institutions to adopt climate risk management standards.

The standards and taxonomy will align with the Fiji government’s commitment to reach net zero by 2050. The country has long been an advocate of implementing climate change measures. In 2021, Fiji passed a Climate Change Act which supports the country’s net-zero emissions targets, long-term climate goals, and commitment to protect its environment. It was also one of the first countries to issue a sovereign green bond in 2017.

There will be a consultation period to obtain input from stakeholders while designing the framework, the IFC said.

Despite being one of the lowest carbon emitters, Fiji is vulnerable to extreme weather patterns and rising sea levels. Like many other Pacific nations, it “is bearing the brunt of the climate crisis”, said Judith Green, an IFC country manager with responsibility for Fiji.

“A robust private sector and deeper climate finance markets are crucial to supporting Fiji’s adaptation efforts and unlocking a sustainable future for the people of Fiji,” she said.

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