Taxonomy for Sustainable Activities in the LAC Region

The aim of this Capstone project is to provide valuable assistance to the Inter-American Development Bank (IDB) in identifying and assessing the current stage of global taxonomy development for sustainable activities, as used to channel investment into domestic economic development projects. The project specifically focused on evaluating five main jurisdictions, including the European Union (EU), Colombia, Mexico, China, and ASEAN, in order to evaluate their respective design and implementation of green and sustainable taxonomies in the financial sector.  

To achieve the project's goals, the team undertook a comprehensive and rigorous assessment of each region's current status in developing a taxonomy. The primary approach involved creating a comparison chart that enabled the team to measure the regulatory and policy difference within global standards. The chart also allowed for easy identification of each region’s current stage of design, highlighting areas of strength and weakness in their taxonomies. By analyzing the strengths and weaknesses of each region's taxonomy, the project provided concrete recommendations for bridging the policy gaps for the green taxonomy and global financial sector.

These recommendations are intended to inform and guide the IDB and other relevant stakeholders on how best to improve their policies and regulations to similarly channel investment into domestic economic development projects across the LAC region. In addition to recommendations, the project developed guidelines and a policy checklist for a Taxonomy for Sustainable Activities for other countries in the LAC region. These guidelines will assist policymakers, regulators, and other stakeholders in developing effective and sustainable finance strategies, with the aim of promoting sustainable economic growth in the LAC region.