When a bank or international donor claims to be financing green projects, the question arises: How can we determine that these funds are truly being used to advance climate and environmental goals? This is the focus of a new study by the DiXi Group, which analyzes international approaches to classifying and monitoring green finance. The report could serve as the basis for developing a Ukrainian system for tracking green investments in line with European practices.
What is green financing?
Despite the widespread use of this term, “green,” “climate,” and “sustainable” financing are distinct concepts.
The study explains:
climate finance supports projects that help reduce emissions or adapt to climate change;
green finance covers broader environmental goals—from protecting water resources to combating pollution;
sustainable financing combines environmental goals with social criteria and principles of responsible management.
Why It’s No Longer Enough to Simply “Call a Project Green”
The world is shifting from declarations to clear rules. Financial institutions are increasingly evaluating, first and foremost, a project’s actual environmental impact. Almost all international approaches are based on two principles:
- a project must make a positive contribution to achieving climate or environmental goals;
- it must not cause significant harm to other environmental goals (the “Do No Significant Harm” principle).
Why Is Everyone Talking About the EU Taxonomy?
The European Union Taxonomy has become one of the main international benchmarks.
In essence, it is a classification system that determines which types of economic activities can be considered environmentally sustainable. Banks, investors, and international financial organizations are increasingly using it as a guide when making investment decisions.
Why This Is Important for Ukraine
As part of its post-war recovery, our country will be working more and more closely with international financial institutions; therefore, the issue is no longer just about securing funding, but also about ensuring that Ukrainian regulations are compatible with European ones. Experts at DiXi Group emphasize that implementing a sustainable finance taxonomy aligned with EU approaches will help increase transparency in the financial sector, simplify interactions with investors, and attract more funds for the country’s green recovery.
What Else Does International Experience Show?
The study analyzes the practices of international financial organizations, the European Investment Bank, the EBRD, the InvestEU programs, as well as the experience of other countries. Despite differences between the models, they all share a common goal—to make the use of green funds transparent, measurable, and understandable for both investors and the government.
What is the bottom line?
The world is gradually shifting from the concept of “green investments” to clear criteria for evaluating them. That is why it is important for Ukraine to think one step ahead: not only to attract funding for recovery but also to develop a classification, monitoring, and reporting system compatible with European standards. According to experts at DiXi Group, this will be one of the key steps toward integrating Ukraine’s financial sector into the European financial landscape and attracting greater investment in sustainable development.
You can access the study, “Overview of Green and Sustainable Finance Classification Systems in the Financial Sector,” via the link
DiXi Group is a member of the PAABS consortium. PAABS is funded by the Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear Safety (BMUKN) under the International Climate Initiative (IKI), the project is supported and coordinated by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. PAABS stands for «Supporting Ukraine in the implementation of the Paris Agreement and adaptation to the impact of climate change in the Black Sea region».
