Will Climate Finance Taxonomy Help India Unlock $2.5 Trillion in Green Investment?
India has taken a major step towards aligning its financial system with climate goals by unveiling a draft Climate Finance Taxonomy on May 7, 2025. This move aims to direct both domestic and foreign investments into truly sustainable activities, improve investor confidence, and reduce the risk of greenwashing.
With ambitious climate targets set—achieving net-zero emissions by 2070 and ensuring that 50% of electricity comes from non-fossil sources by 2030 India needs to unlock $2.5 trillion in green investment by the end of this decade. The taxonomy is designed to facilitate this capital flow while providing clarity on what constitutes a climate-aligned economic activity.
Why a Climate Finance Taxonomy?
Despite an increasing number of financial institutions adopting green finance termi...