India’s phase one draft Climate Finance Taxonomy sends a strong signal in aligning the country’s financial flows with its ambitious climate and development objectives. A particularly noteworthy aspect of the taxonomy is its focus on MSMEs, and its recognition of agriculture’s critical role in both climate change mitigation and adaptation, both which make it stand out in comparison to many international taxonomies.
While the phase one framework lays a strong foundation and this guidance will help many financial institutions in India align their net zero transition plans, the final taxonomy will help us build a strong climate finance proposition and create significant opportunities for international and domestic investors to contribute to India’s green transformation.
