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How the Climate Bonds Initiative’s Taxonomy Could Unblock Resilience Finance

The sustainable finance non-profit's entrance into the A&R taxonomy arena could be a game changer

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  • The Climate Bonds Initiative (CBI), an experienced standard-setter and certifier of climate-friendly financial instruments, is working to create a taxonomy for adaptation and resilience (A&R) investments

  • A 26-strong Resilience Taxonomy Advisory Group (RTAG) will help CBI create a prototype taxonomy by July

  • The CBI’s entrance into the taxonomy arena could be a gamechanger given its history, reach, and influence

  • The challenge will be to create a taxonomy that is easy to use, but also credible in the eyes of investors, issuers, and climate advocates

  • One thing a taxonomy can’t do on its own: make A&R investments financially attractive to investors

It’s a dam stymying the flow of adaptation finance: while investors want to bankroll climate-proofing projects, they don’t know what “counts” as an adaptation and resilience (A&R) investment, and are wary of putting capital on the line without assurances that it’ll be put to good use.

One solution? Have an expert group define an A&R classification system, one rooted in science but also easy to use for climate naïfs in the financial sector.

The Climate Bonds Initiative (CBI) is working to make this vision a reality through its Resilience Taxonomy Advisory Group (RTAG), which formally launched this month.

This crack team of 26 adaptation finance pros plans to pull together a Climate Bonds Resilience Taxonomy (CBRT) prototype by July, with a finalized version to follow. The hope is the taxonomy will then be used by investors to identify A&R investments, and by organizations to structure A&R financial products.

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