Armenia has witnessed the launch of the “Developing Green Taxonomy in Armenia” project, a collaborative initiative between the World Bank Group, the Ministry of Economy of the Republic of Armenia, and the American University of Armenia Acopian Center for the Environment. This year-long project aims to create a policy and legal framework to promote green investments in the country. By adopting a green taxonomy, Armenia seeks to establish a robust system for identifying, selecting, and financing sustainable development projects. Green taxonomies have been developed worldwide, including in China, the European Union, Georgia, the UK, and various Asian and Central Asian countries.
Armenia’s Ministry of Economy, in cooperation with the World Bank, requested support for the development of a national green and transition taxonomy. The project involves multiple government bodies, the Central Bank of Armenia, as well as business and civil society communities. The initiative aligns with the government’s GREEN (Growth Recovery to Empower, Equip and Nurture) Armenia platform, which advocates transitioning to a green economy model. By adopting a green taxonomy, policymakers and economic agents in Armenia benefit from clear definitions of environmentally sustainable economic activities and investments. This facilitates access to green and climate finance, promoting investments that advance the country’s environmental, development and social policy objectives.
To ensure substantive input, a dedicated expert working group comprising representatives from government bodies, the Central Bank of Armenia, Yerevan municipality, and thematic and sectoral specialists has been established. The expert working group collaborates closely with the AUA Acopian Center for the Environment, which engages thematic and sectoral specialists to conduct research and focus-group discussions with industry, academia and civil society. The findings from these consultations inform the final policy documents to be approved by the government. Additionally, the Acopian Center supports capacity development in Armenia for the creation and implementation of green taxonomies.
Recently in Georgia, the National Bank took the lead in developing the Sustainable Finance Taxonomy (SFT) and associated regulations for loan classification and reporting. The SFT was developed in collaboration with local and international experts, stakeholders and financial institutions. The aim of the SFT is to establish consistent standardised regulations for loan classification, screening and reporting by commercial banks and other financial institutions. The taxonomy is tailored to Georgian circumstances and development priorities, while adhering to international best practices. It encompasses both green and social taxonomies and allows for continuous review and enhancement. Commercial banks play a crucial role in implementing the SFT, ensuring loans align with the regulation’s criteria. Transparency and accountability are promoted through monthly reporting on green loans, contributing to the integration of sustainability principles into Georgia’s financial system and advancing the country’s transition to a greener economy.
In conclusion, the development of green taxonomies in Armenia and Georgia lays the foundation for robust and sustainable green finance ecosystems. These taxonomies provide clear definitions and criteria for identifying and promoting environmentally sustainable investments, attracting capital and fostering the growth of green projects. By aligning with international best practices and enhancing transparency, Armenia and Georgia position themselves as attractive destinations for sustainable investments, contributing to the global transition towards a greener and more sustainable future.