Eswatini validates green finance taxonomy framework
Felicia Dlamini-Kunene, Deputy Governor of the Central Bank of Eswatini, opened a stakeholder workshop to validate the country's Green Finance Taxonomy. This national initiative aims to align the financial sector with emerging climate and environmental priorities.
Aligning finance with climate priorities
The Central Bank of Eswatini (CBE) embarked on a structured programme, collaborating with the UNDP to integrate climate and nature-related considerations into its core mandates.
This journey began with the recognition that climate and environmental risks have real implications for financial stability, monetary policy transmission, and the safety and soundness of financial institutions.
The first phase focused on building internal awareness and capacity, ensuring staff and leadership understood climate risks within the central banking and supervisory context.
This was followed by extensive stakeholder engagement and diagnostic work, including assessments to understand the financial sector's exposure to climate-related risks and existing gaps in policy, data, and market practices.
These insights were critical in shaping the approach and ensuring evidence-based, context-specific interventions.
Collaborative framework development
The development phase, supported by the UNDP, established a Project Steering Committee and a Technical Working Group.
This group includes representatives from the Ministry of Tourism and Environmental Affairs, Ministry of Finance, FSRA, Centre for Financial Inclusion, and the Eswatini Bankers Association.
The Technical Working Group co-created the draft Green Finance Taxonomy, ensuring alignment with international best practices and Eswatini's local context.
Peer learning with regional and international networks, including other central banks, provided valuable lessons.
Capacity building has also been a key pillar, strengthening collective understanding of climate and nature-related financial risks and opportunities.
A critical step for sustainable growth
The draft taxonomy provides crucial clarity for Eswatini's market on green and sustainable economic activities.
It positions the nation to attract sustainable investments, fostering green economic growth in a rapidly evolving global financial landscape.
However, its ultimate success hinges on effective implementation and continuous adaptation to ensure the framework remains practical and reflective of national priorities.