Catalyzing Climate Action: The Role of Green Taxonomy and the Green Climate Fund in Sustainable Development

Narisetti Pavani; Jennifer Fernandes

doi:10.55524/ijirem.2025.12.2.13

Abstract

The concepts of “green taxonomy” and the “Green Climate Fund” have garnered significant attention as the global push for sustainable economic practices intensifies. A green taxonomy is a classification system that identifies environmentally sustainable investments based on their alignment with specific ecological goals, as defined by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). This study explores the evolving landscape of green taxonomies, focusing on the European Union's Green Taxonomy, the Climate Bonds Initiative, and developments in India, China, and the ASEAN region. Key findings indicate regional disparities in taxonomy design and implementation. The EU framework aims for net-zero emissions by 2050, while the Climate Bonds Initiative focuses on certifying green bonds with measurable impacts. Conversely, China's taxonomy aligns with its national economic goals, showcasing region-specific sustainability strategies. Additionally, the frameworks emerging in India and ASEAN highlight the need for localized approaches tailored to diverse socioeconomic and climatic conditions. The study also underscores the critical role of the Green Climate Fund in facilitating global climate action by financing adaptation and mitigation projects, thereby supporting climate-resilient development across both developed and developing countries.

Keywords

Green Taxonomy, Sustainable Finance & Development, Net Zero Carbon Emissions, Green Climate Fund, Global Climate Action.

References

A. R. Dariah, A. M. Rani, and P. Srisusilawati, "Green taxonomy for sustainable production across countries," Social and Humaniora Research Symposium (SoRes), KnE Life Sciences, pp. 556–564, 2023. Available from: https://tinyurl.com/mr3c5mrc
J. Debbarma and Y. Choi, "A taxonomy of green governance: A qualitative and quantitative analysis towards sustainable development," Sustainable Cities and Society, vol. 79, p. 103693, 2022. Available from: https://doi.org/10.1016/j.scs.2022.103693
J. Kooroshy, L. Dai, and L. Clements, Sizing the green economy: Green revenues and the EU taxonomy, FTSE Russell, 2020. Available from: https://tinyurl.com/mrt3mjv4
E. Marrekchi, W. Besbes, and D. Dhouib, "A new taxonomy for the green vehicle routing problem," in Proc. 6th Int. Conf. Metaheuristics and Nature Inspired Computing (META), 2016, pp. 516–526. Available from: https://tinyurl.com/4hn3cz27
L. Alessi and S. Battiston, "Two sides of the same coin: Green taxonomy alignment versus transition risk in financial portfolios," Journal of Financial Stability, vol. 66, p. 101977, 2022. Available from: https://doi.org/10.1016/j.irfa.2022.102319
K. Suchak, "Green Taxonomy: India's Need of an Hour," LawFoyer Int'l J. Doctrinal Legal Rsch., vol. 2, p. 639, 2024. Available from: https://tinyurl.com/f95j8an3
World Bank, Guidance note on Uzbekistan green taxonomy, Washington, DC: World Bank, 2024. Available from: https://tinyurl.com/u9rkdzuz
D. W. Marshall, The GLOBE Series: dealing with environmental challenges, 1991. Available from: https://tinyurl.com/5yddkde3
T. Ehlers, D. (N.) Gao, and F. Packer, "A taxonomy of sustainable finance taxonomies," Bank for International Settlements, 2021. Available from: https://www.bis.org/publ/bppdf/bispap118.htm
European Union, "EU taxonomy overview," Available from: https://tinyurl.com/5e9wwcn9
European Union, "EU taxonomy regulation," EUR-Lex, 2021. Available from: https://tinyurl.com/muyyfre2
Ernst & Young (EY), "EU taxonomy reporting," Available from: https://www.ey.com/en_si/assurance/eu-taxonomy-report
Climate Bonds Initiative, "Climate Bonds Initiative," Available from: https://www.climatebonds.net
J. W. Lee, "Green finance and sustainable development goals: The case of China," Journal of Asian Finance, Economics and Business, vol. 7, no. 7, pp. 577–586, 2020. Available from: https://tinyurl.com/2p4n6bww
Green Finance Development Center, "Green finance trends in China: China’s green finance policy landscape," Available from: https://tinyurl.com/3n36pc3s
X. Zhang, Q. Meng, and Y. Le, "How do new ventures implementing green innovation strategy achieve performance growth?" Sustainability, vol. 14, no. 4, p. 2299, 2022. Available from: https://doi.org/10.3390/su14042299
E. Kuzmin, B. Mirzaev, and U. Alimov, "Green taxonomy for sustainable development," E3S Web of Conferences, vol. 574, p. 00001, 2024. Available from: https://doi.org/10.1051/e3sconf/202457400001
T. Guseva, S. Panova, I. Tikhonova, A. Volosatova, and C. Bhimani, "Resource efficiency enhancement as a common background for green taxonomies of BRICS countries," Proc. Int. Multidisciplinary Scientific GeoConference SGEM 2023, 2023. Available from: https://tinyurl.com/ymjxw9vr
Climate Policy Initiative, "CPI in India," Available from: https://tinyurl.com/v3k5way7
Indian Institute for Human Settlements, "Climate finance knowledge gateway," 2024. Available from: https://tinyurl.com/3n6aamvk
World Bank, Developing a national green taxonomy: A World Bank guide, 2020. Available from: https://tinyurl.com/yadkw6dx
World Bank, Catalyzing Private Financing for Sustainable Recovery and Growth (P177985). Available from: https://tinyurl.com/nyt3s6we
Ernst & Young (EY), "EU taxonomy report: Insights into the evolving regulatory landscape for sustainable finance," Available from: https://tinyurl.com/3ubyakh7
Green Climate Fund, "Adaptation," Available from: https://www.greenclimate.fund/theme/adaptation
Germanwatch, Available from: https://www.germanwatch.org/en
Intergovernmental Panel on Climate Change (IPCC), Available from: https://www.ipcc.ch/
Green Climate Fund, "Mitigation," Available from: https://www.greenclimate.fund/theme/mitigation
L.-D. Radu, "Determinants of green ICT adoption in organizations: a theoretical perspective," Sustainability, vol. 8, no. 8, p. 731, 2016. Available from: https://doi.org/10.3390/su8080731
C. Hepburn, N. Stern, C. Xie, and D. Zenghelis, "China’s Economic Development in the New Era: Challenges and Paths," China Finance and Economic Review, vol. 11, no. 2, pp. 3–22, 2022. Available from: https://tinyurl.com/bc8da4c5

Cites this article as

N. Pavani, J. Fernandes, "Catalyzing Climate Action: The Role of Green Taxonomy and the Green Climate Fund in Sustainable Development", International Journal of Innovative Research in Engineering & Management (IJIREM), Vol-12, Issue-2, Page No-76-83, 2025. Available from: https://doi.org/10.55524/ijirem.2025.12.2.13

Corresponding Author

Narisetti Pavani

MA Scholar, Department of Economics, JAIN (Deemed-to-be University), Bangalore, India

Download Full Paper

Download PDF

No. of Downloads: 5 | No. of Views: 76

-->

Catalyzing Climate Action: The Role of Green Taxonomy and the Green Climate Fund in Sustainable Development

Citations

Download Full Paper PDF

Total View 76

Total Download 5