Green finance taxonomy key in preventing greenwashing

Dr. Peter Dery – Director of Environment at the Ministry of Environment, Science, Technology and Innovation – has highlighted positive impacts the recently launched Green Finance Taxonomy will have on the nation’s strategy of mobilising resources to support green investment.

Speaking at a meeting organised by the Finance Ministry on the ongoing COP 29’s sidelines in Baku, Azerbaijan, he commended the Ministry of Finance for its initiative – noting that “this will prevent greenwashing and that is why the Ministry of Environment, Science, technology  and Technology, MESTI, fully endorses this initiative”.

Greenwashing is the act of making false or misleading statements about the environmental benefits of a product or practice. This is a way for companies to continue or expand their pollution as well as related harmful behaviours, all while gaming the system or profiting off well-intentioned, sustainable-minded consumers.

The Director of Environment cited several instances when MESTI had turned down project documents because thorough assessment of those projects methodologies and baselines revealed clear instances of greenwashing.

“So, MESTI will use this Green Finance Taxonomy launched by the Ministry of Finance to revise existing policies and frameworks to guide our selection for green investment in Ghana and help reform our own architecture toward attracting green investment,” he assured.

He later called on relevant institutions such as the National Development Planning Commission and other regulatory agencies to institutionalise policies and legislation to back the Green Finance Taxonomy’s main objective of “ensuring effective industry compliance and preventing greenwashing”.

Dr. Dery further argued that while  climate change issues remain urgent, environmental policies must be broadened to address pollution and biodiversity issues as well.

“Our approach shouldn’t be narrowly defined by climate alone,” he stated. “We need frameworks that encompasses all environmental concerns, fostering  sustainable development across multiple fronts.”

The Ministry of Finance launched the first phase of Green Finance Taxonomy to guide investments toward sustainable and climate-resilient projects.

Green Taxonomy refers to the classification system that helps identify and classify investments as ‘green’ based on their alignment with specific environmental objectives and targets.

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