UNEP FI and UN Economic and Social Commission for Asia and the Pacific (ESCAP), with support from the Sustainable Finance Institute Asia (SFIA) and under the guidance of the ASEAN Taxonomy Board (ATB), are launching a new collaboration, the ASEAN Regional Taxonomy Capacity-Building Initiative. It aims to strengthen the capacity of ASEAN financial policymakers and regulators, to design, implement and operationalize sustainable finance frameworks to help address sustainability risks and opportunities.

As governments and financial institutions across ASEAN have been working to scale the sustainable finance transition at a time when needs across Southeast Asia continue to grow, sustainable finance taxonomies have become valuable tools within the policy enabling environment. These classification systems help provide clarity around which activities meet defined sustainability criteria, which in turn provides more consistency around what is considered green, sustainable or transitional. Used effectively, taxonomies can support transparency and comparability and more consistent assessment across sustainable finance markets—fostering greater certainty around financial decision-making and helping to enable scaling of projects and initiatives that meet taxonomy criteria for sustainability.

ASEAN’s regional Taxonomy for Sustainable Finance (ASEAN Taxonomy) was first launched in 2021 and most recently updated with Version 4 in November 2025. The region has been moving into a more mature phase of sustainable finance policy development, with the ASEAN Taxonomy providing a common regional reference point, while national taxonomies continue to develop across Member States. The ASEAN Taxonomy is already being used across the region, and attention is increasingly turning to how its application can be scaled and supported across different markets and use cases.

As implementation progresses, there is a growing need to support broader and more consistent practical application across ASEAN. This includes applying criteria to real projects, navigating differences between national and regional frameworks, dealing with data and verification challenges, and understanding how taxonomies interact with transition and adaptation finance. These challenges underscore a growing need for practical capacity-building and peer exchange among ASEAN central banks, financial regulators, ministries of finance and other financial authorities.

The new collaboration seeks to build capacity across the region to help facilitate the wider and effective application of taxonomies across markets and support credible sustainable and transition finance. It will provide a neutral and practical forum for regulatory peer learning, structured capacity building, technical exchange, and collaboration across jurisdictions. The initiative will operate for an initial three-year period under the auspices of the ATB’s Capacity Building Agenda for the ASEAN Taxonomy, with three initial main areas of focus:

• Taxonomy adoption, implementation, usability and interoperability
  A key challenge within ASEAN is how its national frameworks interact within the region, with the ASEAN Taxonomy, and with other global taxonomies. Within ASEAN, Member States need the tools to understand how national taxonomies align with the ASEAN Taxonomy, while recognizing legitimate differences in economic structures, policy priorities and transition pathways. Greater interoperability among these taxonomies can help users navigate areas of convergence and divergence across frameworks and reduce unnecessary fragmentation, particularly for cross-border sustainable and transition finance. The joint initiative will support ASEAN Member States in implementing national and regional taxonomies while strengthening alignment with the ASEAN Taxonomy and relevant international frameworks.
• Practical taxonomy application, including for the real economy energy transition
  Taxonomies need to be usable in assessing real-economy activities, technologies and investments, including those central to ASEAN’s energy transition. The initiative will focus on the technical and operational issues that might arise when taxonomies are applied to real-economy activities, projects and financial transactions, including how taxonomies can support credible sectoral transition pathways and help users assess activities. This will include exploring practical implementation support tools and approaches that can make taxonomy criteria easier to interpret and apply in practice, helping to support uptake and usability across different taxonomy frameworks.
• Market implementation and feedback from financial institutions and market participants
  For the ASEAN Taxonomy to help move markets toward meeting national and regional sustainability goals, it needs to be applied in practice by financial institutions to identify, assess and finance eligible activities, technologies and solutions across sectors such as power generation, grids, storage, energy efficiency and other energy transition applications. Commercial viability, bankability, and integration into lending, investment and product development are all important factors in the equation. The initiative will support capacity-building in these areas, while creating opportunities to gather structured feedback from financial institutions and other market participants on practical implementation experience. This can help the ATB understand emerging usability issues and market needs and inform the continued evolution of the Taxonomy and its criteria over time.

In addition to guidance of the ATB, the collaboration will coordinate closely with other key partners as relevant, such as academic institutions, international organizations, and relevant regional and international networks. Following the initial three-year period, the collaboration could continue to evolve as a flexible and collaborative mechanism that can respond to emerging priorities and implementation needs. In the future, this could include deeper engagement on sector-specific applications and other areas identified by the ATB, partners and stakeholders.

The collaboration was launched with an inaugural session in Bangkok on October 15, 2026, held back-to-back with the IMF–World Bank Annual Meetings. The session brought together ASEAN financial authorities for peer exchange on current taxonomy implementation challenges and emerging priorities, alongside practical capacity-building on taxonomy interoperability and assessment. It will also serve to identify priority needs and themes for subsequent activities under the three-year programme.

The initiative complements UNEP FI’s broader work on sustainable finance taxonomies globally, including efforts to improve taxonomy usability, support implementation challenges faced by financial institutions and promote interoperability among sustainable finance frameworks in different markets.