6 January 2021
As sustainable finance continues to grow, interest by investors, banks and issuers has broadened beyond financing for ‘green’ activities, and calls have been made to include financing for the transition of high carbon-emitting activities and assets towards a Paris Agreement-aligned economy. Harmonised approaches to transition financing standards are important for building confidence in this market by assisting the financial sector to identify the activities that need to transition and ensure their transition pathways are credible and impactful.
In April 2020, we shared a Client Update on the emerging use of transition financing to supplement existing green financing practices. Further development in the transition financing ‘regulatory’ landscape has taken place in the short span of just over six months, and in this update, we look at the milestones in the development of this landscape, focussing on the more recent developments and the likely next steps.
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