General Guidance for Tracking Green Finance

The guide establishes 'Common Principles' for tracking green finance, emphasizing conservativeness and granularity. It details a three-step qualification process for adaptation finance and a whitelist-based approach for mitigation. It also introduces a methodology for biodiversity finance based on OECD Rio Markers and the Kunming-Montreal Global Biodiversity Framework, while addressing challenges like taxonomy misalignment and resource limitations within development finance institutions.

• The IDFC's green finance tracking is governed by three overarching principles: conservativeness (under-reporting when data is uncertain to avoid overestimation), granularity (tracking at the most detailed project component level), and complementarity (aligning with UN Sustainable Development Goals).
• Mitigation finance is qualified through a three-step process: determining if the activity contributes substantially to mitigation, verifying it is on the Common Principles whitelist and meets eligibility criteria, and ensuring it is not on the exclusion list.
• Mitigation activities are categorized into three types: negative or very low emissions (e.g., carbon sequestration), transitional activities (important for the transition but still emissive), and enabling activities (necessary for implementing other mitigation activities).
• Adaptation finance tracking uses a context-based three-step qualification process: stating the climate change vulnerability context, providing evidence of intent to reduce that vulnerability, and establishing a direct link between project activities and the identified vulnerability.
• Adaptation activities are classified into three types to determine quantification: Type 1 (resilience of the project, <100% finance), Type 2 (resilience through the project with shared objectives, <100% finance), and Type 3 (adaptation as the primary objective, 100% finance).
• Biodiversity finance is qualified based on whether it makes a positive and substantive contribution to nature without adversely impacting other objectives, utilizing six OECD DAC eligibility criteria and aligning with the Kunming-Montreal Global Biodiversity Framework.
• Biodiversity finance quantification follows the Rio Markers rating system: 100% of the value is counted if biodiversity is the principal objective, and 30% is counted if it is a significant objective.
• IDFC members face significant challenges in tracking, including misalignment between the Common Principles and other taxonomies (such as the EU Taxonomy or OECD Rio Markers), ambiguities in adaptation definitions, and resource limitations such as the lack of dedicated tracking departments.
• The guide recommends that green finance tracking be conducted ex-ante, primarily during the design, appraisal, and board approval stages, with ex-post monitoring to evaluate actual expenditures against budgeted amounts.

APA

Stout, S., Alberti, C., Miao, G., Abraham, S., Strinati, C., Padmanabhi, R., & Petsinaris, F. (2024). General Guidance for Tracking Green Finance. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/11/IDFC-General-Guidance-for-Tracking-Green-Finance.pdf

Chicago

Stout, Sean, Caroline Alberti, Gaoyi Miao, Sasha Abraham, Costanza Strinati, Rajashree Padmanabhi, and Foivos Petsinaris. General Guidance for Tracking Green Finance. Climate Policy Initiative, 2024. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/11/IDFC-General-Guidance-for-Tracking-Green-Finance.pdf.

Wikipedia

{{cite report |last1=Stout |first1=Sean |last2=Alberti |first2=Caroline |last3=Miao |first3=Gaoyi |last4=Abraham |first4=Sasha |last5=Strinati |first5=Costanza |last6=Padmanabhi |first6=Rajashree |last7=Petsinaris |first7=Foivos |title=General Guidance for Tracking Green Finance |publisher=Climate Policy Initiative |date=October 2024 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2024/11/IDFC-General-Guidance-for-Tracking-Green-Finance.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stout2024general, author = {Stout, Sean and Alberti, Caroline and Miao, Gaoyi and Abraham, Sasha and Strinati, Costanza and Padmanabhi, Rajashree and Petsinaris, Foivos}, title = {{General Guidance for Tracking Green Finance}}, institution = {Climate Policy Initiative}, year = {2024}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2024/11/IDFC-General-Guidance-for-Tracking-Green-Finance.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }