Fijians will soon be able to benefit from the development of a green finance taxonomy that’s expected to pave the way for greater investment in climate-friendly projects.
It will also help drive more inclusive and sustainable economic growth.
Under an agreement announced today, the Reserve Bank of Fiji and the International Finance Corporation, through support from the Australian Government, will work together to develop guidelines and parameters to clearly define green assets.
The new taxonomy will deepen climate finance options in Fiji, encouraging more lending and investment to support the country’s climate mitigation and adaptation goals, and create green jobs.
RBF Governor Ariff Ali says a well-defined and structured Fijian taxonomy will enable the financial sector to channel private sector capital towards climate-related projects which will contribute to achieving national environmental objectives.
Ali says this is a critical step towards strengthening Fiji’s financial resilience, including the stability of the financial system in the face of the growing challenge from climate change.
IFC, a member of the World Bank Group will also support RBF in integrating environmental, social and governance standards in financial market operations.
It will also encourage adoption of these standards by businesses and financial institutions including climate risk management.
IFC Country Manager, Judith Green says while Fiji is one of the lowest emitters of carbon in the world, like other Pacific nations, it is bearing the brunt of the climate crisis.
Green adds a robust private sector and deeper climate finance markets are crucial to supporting Fiji’s adaptation efforts and unlocking a sustainable future for the people.
The introduction of a green taxonomy and ESG standards is aligned with the Fiji government’s aim of increasing investments in projects that champion climate resilience and environmental sustainability, as well as achieving net-zero national emissions by 2050.
There will be a consultative approach to obtain input from key stakeholders in considering the design of the framework.
Fiji has been a strong advocate for climate change and was among the first nations in the world to issue a sovereign green bond in 2017.
The bond raised FJD100 million with an emphasis on helping the country adapt to the changing climate.