Malkhaz Dzadzua
Doctor of Economics, Assistant Professor, Central University of Europe
Abstract
Sustainable Finance Taxonomies provide classification systems that define which economic activities can be considered environmentally and socially sustainable. They are essential tools for directing private or public capital flows, preventing green washing and ensuring comparability across financial markets.
This paper compares the sustainable finance taxonomies of Georgia and the European Union (EU). While the EU Taxonomy is a science-based, legally binding classification system covering six environmental objectives, Georgia’s Sustainable Finance Taxonomy adopts a broader approach by including both green and social finance categories. The paper highlights key similarities and differences, evaluates implementation challenges and discusses implications for convergence.
The examples from selected Georgian commercial banks illustrate how the taxonomy is being applied in practice and what are the main challenges Georgian banks face when applying the Taxonomy in practice.
The comparative analysis concludes that Georgia’s sustainable taxonomy is innovative in its inclusion of social finance along with green finance, but requires further institutionalization and alignment with EU standards to attract international impact investments.
Keywords: Sustainable Finance, Taxonomy Regulation, ESG, Green Finance, Social Finance.
JEL: Q01, Q56, G21, G32
DOI: 10.52244/c2025.2
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