Sustainability has become a mainstream consideration for the financial sector. There is however a need for convergence on terminology among market participants and wider stakeholders. In a new publication, ICMA is proposing high-level definitions building on current market usage and existing official sector terminology for the most commonly used terms in the sustainable finance field, for example climate finance, impact finance, green finance and social finance. The objective is to ensure that all participants and stakeholders are using a common and transparent vocabulary. It is also designed as a contribution to other ongoing efforts in the financial industry to develop a consensus around key terms and definitions in sustainable finance.
This is the second publication from ICMA’s Sustainable Finance Committee, which brings together representatives from various ICMA committees, including our buy-side arm, corporate issuer forum and legal and documentation committee, as well as the Executive Committee of the Green Bond Principles and Social Bond Principles, to address cross-cutting sustainable finance developments.