The well-worn motto ‘what gets measured gets done’ is a sensible one. It is particularly relevant when crafting policy that aims at channelling efforts and funds towards important but loosely defined areas. How you attract capital to social impact ventures, for example, when measuring the good that those businesses could bring – similarly to how financial return is accounted for – is often a slippery task. The same is true of environmentally themed products, including green bonds, where ambiguity over definitions rightly invites scepticism.
The European Commission has set out to correct this through its technical expert group (TEG) on sustainable finance, which is compiling a green taxonomy. Feedback was sought up until mid-September, and the commission will then decide how to take the measures forward. The TEG also created a voluntary EU green bond standard earlier in 2019. Getting this right is important for a number of reasons.
