Nepal Rastra Bank Unveils Green Finance Framework

Nepal Rastra Bank has introduced the "Nepal Green Finance Taxonomy 2024" as a framework to address climate change, directing banks and financial institutions to adopt green finance classification.

Green Finance Classification: Governor Maha Prasad Adhikari emphasized that banks, investors, issuers, and regulators must enhance their awareness and capacity to integrate green finance classification into their investment decisions. This classification offers a standardized framework for categorizing economic activities, aiming to promote sustainable finance growth.

Climate Action and Green Economy: Nepal has established national policies and regulatory frameworks, focusing on climate action and advancing the green economy, considering rapid urbanization, infrastructure development, and rising energy demands. Key initiatives include the Environment Protection Act, National Climate Change Policy, and National Adaptation Plans.

Private Sector's Role in Sustainable Development: Nepal Rastra Bank highlighted the crucial role of the private sector in meeting climate change goals. It noted that the private sector can channel investments toward "green" initiatives by enhancing technical skills and capacity.

Nepal's green finance system is expected to contribute to mitigating the effects of climate change while helping the country achieve its sustainable development goals.