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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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Development

World Bank Financing Will Strengthen Learning, Access to Education in Cambodia

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The World Bank today approved financing that, along with a grant from the Global Partnership for Education, will provide US$69.25 million in new funding to help Cambodia improve equitable access to basic education and respond rapidly to crises affecting the education system.

The World Bank will provide a US$60 million credit through its International Development Association while the Global Partnership for Education will deliver a grant of US$9.25 million.

The funding will support the five-year General Education Improvement Project (GEIP), which aims to support Cambodia in achieving the vision outlined in its Education Strategic Plan (ESP 2019-2023), which seeks to “establish and develop human resources that are of the very highest quality and are ethically sound in order to develop a knowledge-based society.” To realize this objective, the government of Cambodia has expressed a commitment to address two main challenges: low student learning outcomes and inequitable access to quality basic education, which includes early childhood, primary, and secondary education.

“Cambodia has certainly made great achievements in expanding access to education, but equitable access to education for certain groups of children, such as those living in remote areas, coming from poor families or ethnic minority communities, and those living with disabilities, remains an issue. Further, student learning outcomes have been greatly affected by the prolonged school closures caused by the COVID-19 pandemic,” said World Bank Country Manager for Cambodia Maryam Salim. “We strongly hope that the project will address these challenges and build back better.”

This funding comes at a crucial time, with the new COVID-19 variant worsening the pandemic’s impact on education systems around the world,” said Global Partnership for Education CEO Alice P. Albright. “We hope these funds will allow Cambodia to continue increasing access to quality education and ensure that the most vulnerable children are in school and learning.”

The project’s key activities will include implementing a school-based management program, providing capacity development to teachers, school leaders, teacher trainers, and educational staff, and improving learning environments. The project calls for construction and rehabilitation of school buildings, science laboratories, teacher training institutions, dormitories for teachers, and special education schools; purchase of education technology equipment; and support for students with disabilities, including disability screening. The project will also include a pilot education technology (EdTech) program for mathematics.

One of the goals of the project is to improve the education sector’s overall performance by building national capacity for education reform programs, revising subsector strategies, piloting continuous professional development, and creating a teaching career pathway. The project will also aim to facilitate the development of the 2024–2028 Education Strategic Plan and hold annual “Best Practice Forums.”

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Tech News

Tech Start-ups Key to Africa’s Digital Transformation but Urgently Need Investment

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The World Economic Forum’s latest report, “Attracting Investment and Accelerating Adoption for the Fourth Industrial Revolution in Africa” analyses the challenges Africa faces in joining the global knowledge-based digital economy and presents a set of tangible strategies for the region’s governments to accelerate the transition.

The Forum’s report, written in collaboration with Deloitte, comes just weeks after the announcement by Google of a $1 billion investment to support digital transformation across Africa, which centres on laying a new subsea cable between Europe and Africa that will multiply the continent’s digital network capacity by 20, leading to an estimated 1.7 million new jobs by 2025. Africa’s digital economy could contribute nearly $180 billion to the region’s growth by the by mid-decade. Yet with only 39% of the population using the internet, Africa is currently the world’s least connected continent.

Tech start-ups such as Kenya’s mobile money solution Mpesa and online retail giant Jumia, Africa’s first unicorn, represent what the continent’s vibrant small business sector is capable of. Despite raising $1.2 billion of new capital in 2020 – a six-fold increase in five years – this represents less than 1% of the $156 billion raised by US start-ups in the same year. Meanwhile, Africa’s investment in R&D was just 0.42% of GDP in 2019 – less than a quarter of the global average of 1.7%.

“African governments urgently need to drive greater investment in the tech sector and the knowledge economy,” said Chido Munyati, Head of Africa Division at the World Economic Forum. “Policy-makers can make a difference by reducing the burden of regulation, embedding incentives within legislation and investing in science and technology skills.”

The report breaks down these three policy enablers:

  • Pass legislation such as “Start-up Acts” designed to spur private sector innovation, reduce the burden of regulation and promote entrepreneurship, in which Tunisia and Senegal are leading the way.
  • Embed incentives for start-ups in legislation, such as start-up grants, rebates on efficiency gains through technology implementation, co-investment of critical infrastructure, tax-free operations for the early years, and incentives for R&D.
  • Invest in workforce education, skills and competencies. Currently, only 2% of Africa’s university-age population holds a STEM-related (science, technology, engineering, mathematics) degree.

However, the analysis of 188 government incentives for business across 32 African countries finds that just 14 incentives – fewer than 10% – facilitate investment in Fourth Industrial Revolution technology. And most of these incentive schemes lack an efficient monitoring and evaluation system to gauge their effectiveness.

Delia Ndlovu, Africa Chair, Deloitte, believes that digital transformation promises to boost economic growth in Africa: “Connecting the region to the global digital economy will not only open new avenues of opportunity for small businesses, but will also increase intra-Africa trade which is low at 16% compared to markets such as intra-European trade which is approximately 65% to 70%.”

African governments have much to learn from each other. In Côte d’Ivoire, an R&D tax incentive has been created to direct investment away from commodities and into innovation. In South Africa, the Automotive Investment Transformation Fund created by the largest manufacturers in the country is facilitating the development of a diverse supplier base to realise the 60% local content target set by the Automotive Production and Development Programme (APDP). In Tunisia, the government offers state salaries for up to three start-up founders per company during the first year of operations, with a right to return to their old jobs if the venture fails.

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Finance

Construction PPE: What and when to use

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Personal protective equipment is essential for construction sites. Every workplace has hazards – from offices to classrooms. However, a construction site has far more hazards than most, and extra caution must be applied. PPE can help keep everyone safe and secure, even when close to a hazard factor. Your employer should provide high-quality PPE to everyone on site. When selecting equipment, use a construction PPE supplier that is CE marked.

How to use PPE

Personal protective equipment is designed to protect you from potential hazards. For example, face masks and eye goggles are worn around toxic chemicals or contaminated air. PPE must fit correctly to be as efficient and safe as possible. A loose-fitting face mask could allow dust particles to squeeze through the gaps. Or ill-fitting thermal trousers could get caught/snag on edges or trail along the ground and cause the worker to fall over. Your PPE needs to be in good condition as well – If there are holes, rips and signs of wear on your PPE, it should be immediately replaced. It is your employer’s responsibility to provide adequate PPE.

PPE is a last resort

PPE is not the only safety measure that needs to be taken. Your employer should reduce the risks on site where possible. For example, a hazardous area should be signposted, and every employee should be trained properly. Every employee should go through health and safety training alongside frequent refresher courses. All employees should be trained in using the machinery on site before they begin operating it. PPE cannot protect someone who does not know how to act safely on site.

What types of PPE are used on-site?

Protective gloves should be worn when handling heavy machinery and sharp tools. The gloves need to allow enough mobility and flexibility so the individual can continue to work. Gloves can also help you grip heavy items and protect you from cold winter conditions.

A tool lanyard is useful for when you are working at a height. The lanyard connects to your wrist so you can carry lightweight tools. For heavier tools, you can use a stronger tether point, like your waist.

High – visibility clothing should be mandatory when working, especially at night. Everyone should wear high visibility clothing on-site, so they are noticeable by moving vehicles. Depending on the weather, you could go for a vest or thick coat.

Stay safe and wear personal protective equipment on construction sites.

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