European Union Ambassador to South Africa, Sandra Kramer

Any tool that can smooth the process of using private funds to augment state action against climate change is critically important to humanity’s survival, according to European Union (EU) Ambassador to South Africa Sandra Kramer.

Kramer said the global climate is changing faster than humanity’s capacity to adapt to it, and that the EU was “steadfast” in its ambition to “stay on course” to have developed a “net-zero economy” by 2030.

To this end, scaling up finance from the private sector is “vital for bridging the financing gap” between projects aimed at switching the EU towards a low-carbon economy that the EU can finance and projects that the EU does not, or will not, have the funds to finance.

That South Africa’s green finance taxonomy is well aligned with that of the EU, and that the research report that shows this sets out in detail where they differ, could expedite investment flows from the EU to South Africa that would assist South Africa’s transition to a low-carbon economy, she noted.

The research report, Comparison of South Africa’s Green Taxonomy to the EU Taxonomy, shows that South Africa’s green finance taxonomy, a first in Africa, is science based and has a high degree of compatibility with that of Europe, while being well attuned to South Africa’s particular needs as an emerging market, Kramer said.

“It is a first step towards promoting clarity on investments into South Africa that can truly be considered green and compliant with the EU’s green investment requirements … The EU stands ready to continue to support this important work, and South Africa’s steps towards building a credible green finance framework,” she said.

“Together we can take the action we need for a just and green transition for South Africa.”