On 29 November, the Sustainable Finance Platform hosted a webinar entitled “Sustainable Finance Taxonomy: Georgian Experience” led by Salome Tvalodze, Head of Sustainable Finance at the National Bank of Georgia (NBG). The NBG approved the Sustainable Finance Taxonomy (SFT) and the Regulation on Loan Classification and Reporting in accordance with the SFT. It was developed with the active involvement of local and international experts and stakeholders. Financial institutions were also actively involved in the process.
The goal behind the development of the SFT in Georgia was to have consistent and standardised regulation on loan classification, screening, and reporting for commercial banks and other financial institutions, as well as to establish common definitions.
The Georgia taxonomy was tailored to Georgian specifics and development priorities, while being in line with international best practices. It incorporates both green and social taxonomies and allows for continuous review and development.
As part of the green taxonomy, loans in specific categories, such as solar PV projects or electric vehicles, can automatically be classified as green; however, for other categories, there are technical requirements and specifications which must first be checked, in order for the loan to be classified as green according to the approved taxonomy.
The main users of the SFT are financial institutions and capital market participants, including public entities, certifiers, verifiers, and other actors. The main players continue to be commercial banks.
According to SFT Regulation, there are three types of loans: green loans, social loans, and sustainable loans. Banks are not permitted to use these three terms when classifying loans, unless they are aligned to the SFT. A “green loan” must be used exclusively for economic activities listed in the green taxonomy, a “social loan” refers solely to activities listed in the social taxonomy, and a “sustainable loan” finances economic activities that simultaneously meet the requirements of green and social taxonomies.
At commercial banks, loans can only be assigned to the green loan category if they are in line with SFT Regulation. As of January 2023, this regulation also requires commercial banks to submit monthly reports on green loans.
Additional information about the SFT and downloadable documents describing in detail the green and social taxonomies are available on the NBG website: https://nbg.gov.ge/en/page/sustainable-finance-taxonomy
The organiser of the webinar, Sustainable Finance Platform, is a new, free platform created by Greenpact B.V. for anyone interested in green finance. It offers year-round access to online discussions, training, seminars, networking opportunities, and Q&A sessions. Furthermore, users can gain insight into the industry, view latest news, reports, articles, and interviews, as well as actively become a part of a growing professional community.
On this platform, professionals can connect with other members via direct messaging and remain up-to-date on issues regarding global and regional sustainable finance. Parties interested in joining the platform, can register at the following link: https://susfinplatform.mn.co
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