Regional Study on Taxonomies and Transition Finance in Asia - Supplementary Material to the Main Report

World Bank

Published

22 Jul 2026

Coverage

Asia

The transition to a low-carbon economy demands an unprecedented scale of investment, with an estimated US$13.6 trillion in investments needed in the Asia-Pacific region by 2030. World Bank estimates suggest that large differences in climate financing needs exist across country income classes—1.1 percent of gross domestic product, on average, in upper-middle-income countries, increasing to 4.4 percent in lower-middle-income countries and as much as 8.0 percent in low-income countries. But with appropriate policy reforms, most climate financing needs could be met by private investments across multiple key sectors. Taxonomies (meaning, classification systems for sustainable activities) have emerged as important tools for directing capital toward climate goals. While most existing taxonomies emphasize “green” activities, there is a growing recognition that taxonomies need to support “transition finance”— that is, finance which encourages the decarbonization of emissions-intensive and hard-to-abate sectors where low-carbon alternatives are not readily available. This study focuses on how transition is defined, operationalized, and embedded in Asian national and regional sustainable finance taxonomies. This document supports Chapter 3 of the report by providing additional informationon transition definitions.