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How to Develop a National Green Taxonomy for Emerging Markets

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The World Bank today published a guide outlining the processes that financial regulators can use to develop a green taxonomy. The publication Developing a National Green Taxonomy: A World Bank Guide will help regulators in emerging economies who seek to “green” their countries’ financial systems.

The lack of clarity about which activities and assets can be defined as green has long posed a barrier to scaling up green finance. A green taxonomy identifies the activities or investments that deliver on environmental objectives, helping drive capital more efficiently toward priority environmentally sustainable projects. The guide can help banks and other financial institutions originate and structure green banking products (e.g., loans, credits, and guarantees). It can also help investors identify opportunities that comply with sustainability criteria for impact investments.

“As a pioneering issuer of green bonds, the World Bank has played a key role in developing sustainable capital markets and facilitating innovative transactions,” said Anshula Kant, Managing Director and World Bank Group Chief Financial Officer. “We are delighted to share this guide that financial regulators could use to support their efforts to scale up green finance. We hope that the methodology and recommended approach will benefit emerging markets as they seek pathways to build a more environmentally sustainable future.”

Given the diverse needs and contexts of emerging economies, this guide avoids one-size-fits-all definitions and standards. Instead, it presents ways to develop a taxonomy based on the environmental objectives relevant to a country’s sustainable development priorities and agenda. A key recommendation is for regulators to provide a technically sound justification for the activities and investments considered green.

This Guide was prepared by the World Bank in response to a request by the Malaysian central bank, Bank Negara Malaysia, to develop a common language on environmental issues by the financial sector and to support decisions related to climate risk in fundraising, lending, and investment activities.

“Bank Negara Malaysia is glad to partner with the World Bank to facilitate global knowledge sharing on green and sustainable finance through the World Bank Group Inclusive Growth and Sustainable Finance Hub in Malaysia,” said Datuk Nor Shamsiah Mohd Yunus, Governor of Bank Negara Malaysia. “Central banks and supervisors have an important role to play in scaling up green finance. We hope this guide developed by World Bank experts will encourage central banks and supervisors to develop a taxonomy of activities that will help green the financial system.”

The recommended approach is based on the World Bank Group’s experience in supporting similar initiatives in several countries, including Colombia, Malaysia, Mongolia, and South Africa. To help countries understand and learn from the varied approaches already being taken, the guide also includes an overview of existing green taxonomies, including those developed by Bangladesh, China, Mongolia, the European Union, and the Climate Bonds Initiative.

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Human Rights

First international treaty to address violence and harassment comes into force

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The first international treaty on violence and harassment in the world of work comes into force on June 25th 2021 – two years after it was adopted by the ILO’s International Labour Conference (ILC).

To date, six countries have ratified the Violence and Harassment Convention, 2019 (No. 190)  – Argentina, Ecuador, Fiji, Namibia, Somalia and Uruguay. Ratifying countries are legally bound by the provisions of the Convention a year after ratification.

Together with Recommendation No. 206 , Convention No. 190 recognizes the right of everyone to a world of work free from violence and harassment and provides a common framework for action.

It provides the first international definition of violence and harassment in the world of work, including gender-based violence and harassment.

Violence and harassment at work takes a range of forms and leads to physical, psychological, sexual and economic harm. Since the adoption of the Convention, the COVID-19 pandemic  has further highlighted the issue, with many forms of work-related violence and harassment being reported across countries since the outbreak began, particularly against women and vulnerable groups.

To mark its entering into force the ILO will launch a global campaign to promote its ratification and implementation. The campaign aims to explain in simple terms what the Convention is, the issues it covers and how it seeks to address violence and harassment in the world of work.

“A better future of work is free of violence and harassment,” said Guy Ryder, the ILO Director-General in his message to launch the global campaign.

“Convention 190 calls on all ILO Member States to eradicate violence and harassment in all its forms from the world of work. I urge countries to ratify the Convention and help build, together with employers and workers and their organizations, a dignified, safe and healthy working life for all.”

The global campaign will be launched during the ILO Action Week on Convention No. 190 , which takes place 21-25 June 2021.

The Action Week calls for renewed commitment from countries to ratify and implement the Convention.

The Action Week begins on 21 June with a virtual high-level dialogue . The speakers will include the ILO Director-General, Ministers of Labour from Argentina and Madagascar, and representatives of the International Organisation of Employers (IOE), the International Trade Union Confederation (ITUC) and the Inter-Parliamentary Union (IPU).

Following the Action Week, the ILO will launch a guide aimed at helping constituents and other stakeholders promote and implement the Convention and Recommendation. The guide covers core principles and measures that countries can take to prevent, address and eliminate violence and harassment in the world of work, including examples of national laws, regulations and policies.

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Environment

A beginner’s guide to sustainable farming

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Industrialized farming has been a reliable way to produce lots of food at a relatively low cost. But it’s not the bargain it was once believed to be. Unsustainable agriculture can pollute water, air and soil; is a source of greenhouse gases, and destroys wildlife. All told that costs economies about $3 trillion every year. And to top it all off, some farming practices have been linked to the emergence of zoonotic diseases, such as COVID-19.

18 June is Sustainable Gastronomy Day, which celebrates local cuisine that is produced in ways that are both environmentally friendly and minimize waste. To mark the occasion, we take a closer look at how to make agriculture more sustainable and what that would mean for the economy, the environment and human health.

What exactly is sustainable agriculture?

It is farming that meets the needs of existing and future generations, while also ensuring profitability, environmental health and social and economic equity. It favours techniques that emulate nature–to preserve soil fertility, prevent water pollution and protect biodiversity. It is also a way to support the achievement of global objectives, like the Sustainable Development Goals and Zero Hunger.

Does sustainable agriculture really make a difference to the environment?

Yes. It uses up to 56 per cent less energy per unit of crops produced, creates 64 per cent fewer greenhouse gas emissions per hectare and supports greater levels of biodiversity than conventional farming.

Why does sustainably produced food seem more expensive?

It may be more costly because it is more labour-intensive. It is often certified in a way that requires it to be separated from conventional foods during processing and transport. The costs associated with marketing and distribution of relatively small volumes of product are often comparatively high. And, sometimes, the supply of certain sustainably produced foods is limited.

Why are some foods so much more affordable–even when they require processing and packaging?

The heavy use of chemicals, medicines and genetic modification allows some foods to be produced cheaply and in reliably high volumes, so the retail price tag may be lower. But this is deceiving because it does not reflect the costs of environmental damage or the price of healthcare that is required to treat diet-related diseases. Ultra-processed foods are often high in energy and low in nutrients and may contribute to the development of heart disease, stroke, diabetes and some forms of cancer. This is particularly concerning amid the COVID-19 pandemic; the disease is especially risky for those with pre-existing health problems.

Do we all have to be vegan?

No. But most of us should eat less animal protein. Livestock production is a major cause of climate change and in most parts of the world, people already consume more animal-sourced food than is healthy. But even small dietary shifts can have a positive impact. The average person consumes 100 grams of meat daily. Reducing that by 10 grams could improve human health while reducing greenhouse gas emissions. 

Is sustainable agriculture possible in developing countries?

Yes. Because sustainably produced food is typically more labour-intensive than conventionally made food, it has the potential to create 30 per cent more jobs. And because it can command higher prices, it can also generate more money for farmers.

Is it possible to make sustainably produced food that is affordable for everyone?

Yes. As demand for certain foods increases, the costs associated with production, processing, distribution and marketing will drop, which should make them less expensive for consumers.  Policymakers can also play a role, facilitating market access and leveling the financial and regulatory playing field.

If it is so important, why hasn’t sustainable farming been adopted as a global standard?

There is a lack of understanding of the way that agriculture, the environment and human health intersect. Policymakers do not typically consider nature as a form of capital, so legislation is not designed to prevent pollution and other kinds of environmental degradation. And consumers may not realize how their dietary choices affect the environment or even their own health. In the absence of either legal obligations or consumer demand, there is little incentive for producers to change their approach.

What are some ways to consume food more sustainably?

Diversify your diet and cook more meals at home. Eat more plant-based foods; enjoy pulses, peas, beans and chickpeas as sources of protein. Eat local, seasonal foods. Purchase sustainably produced foods and learn more about farming practices and labeling. Avoid excessive packaging, which is likely to end up as landfill. Don’t waste food: eliminating food waste could reduce global carbon emissions by 8-10 per cent. Cultivate your own garden, even if it is a small one in your kitchen. Support organizations, policies and projects that promote sustainable food systems. And discuss the importance of healthy and sustainable foods with producers, vendors, policymakers, friends and family.

UN Environment

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Finance

Turkish Airlines and Turkish Cargo Rise to the Top Amid Pandemic

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M. İlker Aycı, Chairman of the Board and the Executive Committee of Turkish Airlines

Turkish Airlines successfully ended the fiscal year 2020 with 6.7 billion USD revenue, which accounts for 50% of the preceding year’s level, with a net loss of only 836 million USD. During these uncertain times, the airline was also able to maintain its robust route network. According to Eurocontrol, in April 2021 Turkish Airlines operated an average of 685 flights per day – almost double the number of the closest competitor in Europe, Lufthansa. In 2020, Turkish Airlines flew 28 million passengers, with an impressive load factor of 71%. Currently, the airline serves 179 international destinations with 16 intercountry and 58 intercontinental flights. The new Istanbul Airport also stayed on top: even with a 68% loss of traffic, it was still Europe’s most successful airport as of March 2021, with 616 departing and arriving flights.

This success is based on cost cutting activities, capex reduction and active capacity management. In fact, Turkish Airlines achieved such performance without relying on any governmental cash injections. Furthermore, agreements with Boeing and Airbus on fleet growth will further decrease the aircraft financing needs of Turkish Airlines by around 7 billion USD in the coming years.

“Our success as the best performing flag-carrier airline in Europe is not coincidental. Apart from the multiple measures we took, we owe this success to our dedicated staff. While other airlines faced layoffs, we did not part ways with any of our colleagues during this process. Instead everyone within Turkish Airlines accepted salary cuts from up to 50% depending on the role and responsibilities. The exceptional sense of unity within our staff is what sets Turkish Airlines apart: together as a family, we decided that no member of the Turkish Airlines family would be left behind during this crisis.”, says Turkish Airlines’ Chairman of the Board and the Executive Committee, M. İlker Aycı.

Turkish Airlines also turned the pandemic into an opportunity to increase its cargo operations, with 50 of its passenger aircrafts being reconfigured to increase its cargo fleet capacity. Turkish Cargo managed to become one of the top five air cargo companies in the world and the 6th largest cargo company. The company increased its market share in total global cargo revenue from 0.6% in 2009 to 4.7% in 2020. As of February 2021, one in 20 cargo flights around the world were handled by Turkish Cargo.

This allowed Turkish Cargo to deliver 50,000 tons of medical supplies, including more than 45 million doses of COVID-19 vaccines, to destinations all over the world. In addition, new technologies and innovative solutions have been developed. One example is SmartIST, one of the largest air cargo facilities in the world, which is scheduled to open this year. Located at Istanbul Airport, the facility uses modern technology such as drones and automated robots to process and deliver goods even faster. 

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