Countries and regions around the world are seeking to green their financial systems by developing sustainability taxonomies that provide a common set of definitions.

Despite attempts to harmonize these taxonomies, significant differences remain, and taxonomies will continue to evolve over time. This has significant implications for financial institutions seeking to interpret taxonomies across different operating markets and for how they should respond to the challenge of collecting and managing sustainability data. How can they best formulate and implement a coherent approach?

In this paper, we compare the key APAC taxonomies to each other and to the influential EU Taxonomy, explaining why financial institutions need to better understand the differences between taxonomies and also develop new tools to help them cope. As we describe, these tools include an overarching Climate Aligned Finance (CAF) framework and a strategy for automating internal IT systems to lessen the ongoing burden of data collection, assessment and disclosure.