NOVEMBER 2021ASEAN TAXONOMY FORSUSTAINABLE FINANCEVERSION 1ForewordMessage from the Chair of the ASEAN Taxonomy Board (ATB)The Association of Southeast Asian Nations (ASEAN)has always placed importance on the well-being of its citizens and the need for the region's growth and development to be sustainable.TheASEAN Socio-Cultural Community envisages an inclusive community that provides high qualityof life,equitable access to opportunities for all and the promotion and protection of human rights.It also aims for a sustainable community that promotes social development and environmentalprotection.As the world's fifth largest economic bloc,ASEAN is acutely aware of the role it plays,and can play,in the global sustainability agenda.All ASEAN Member States (AMS)have ratifiedthe Paris Agreement.In 2015,the ASEAN Heads of State and Government adopted theDeclaration on Institutionalising the Resilience of ASEAN and Its Communities and Peoples toDisasters and Climate Change (ASEAN,2015 [1])where AMS committed to forge a more resilientfuture by reducing existing disaster and climate related risks,preventing the generation of newrisks and adapting to a changing climate through the implementation of economic,social,cultural,physical,and environmental initiatives.All AMS are signatories to the United Nations SustainableDevelopment Goals(SDG)and have agreed to the Regional Roadmap for Implementing the 2030Agenda for Sustainable Development in Asia and the Pacific.The ASEAN region is highly vulnerable to climate change,especially given its coastal populationsand reliance on agriculture.Climate change has a profound impact on the citizens,businessesand governments of ASEAN.It has caused economic and physical damage through unpredictableweather patterns,rising temperatures and sea levels,extreme weather events,land degradation,and damage to biodiversity and has resulted in loss of properties,assets and human lives.Thechallenges faced by AMS in achieving the SDG targets were significant even before Covid-19,but the setbacks caused by the pandemic to the trajectory of these efforts now need to beaddressed urgently.Financing is key in enabling ASEAN to advance its sustainability agenda.The role of sustainablefinance was recognised by the ASEAN Finance Ministers'and Central Bank Governors'Meeting(AFMGM)in 2019.ASEAN is a unique construct and has its own context and needs.Its memberstates are diverse economically and socially there needs to be an orderly transition towards asustainable ASEAN is critical.Having a common understanding of what is sustainable is essentialif ASEAN is going to attract and orient capital towards sustainable investments and away fromnon-sustainable activities.This is where a credible regional sustainable finance taxonomy,whichis interoperable with other regional and international taxonomies,is needed.While each AMSmay develop its own national sustainable finance taxonomy to meet its individual needs anddomestic stage of development,having a common language and an overarching guide that everyAMS can apply across all segments of the economic sector will provide clarity and confidence toall stakeholders.Global,regional and domestic investors would have more information andgreater confidence on what their funds will be used for and businesses will have clear guidanceon what they need to do for their sustainability journey.A credible taxonomy that is aligned withinternational benchmarks will also help financial institutions and investors better understand the