Executive Summary

As climate finance grows in scale and influences investment and capital allocation decisions, the need for credibility in its use is becoming increasingly important. While greenwashing – false claims of environmental accomplishment – has made the form and use of climate finance more prominent. The white paper is based on an expert webinar organised by the Climate and Sustainability Initiative (CSI) in association with the Ministry of Finance, Government of India, during India’s BRICS presidency.

The paper distinguishes deliberate misrepresentation from the more uncertain territory of contested green classifications, cautioning against treating all imperfect claims as greenwashing. It distinguishes the roles of taxonomies, disclosure and verification, arguing that no single ‘stamp of approval’ can take the place of a well-structured, multi-layered credibility system. For BRICS economies, diverse development priorities, energy systems and transition pathways make a one-size-fits-all approach neither straightforward nor desirable. The paper points out the risks of over-regulation, such as “green hushing” and “green stopping”, while emphasizing the need for policy and regulatory incentives to accelerate climate finance. It also highlights guarantees, de-risking tools, and a broader approach to accelerate climate finance spanning mitigation, adaptation, and ‘just transition’.

The paper’s central proposition is “interoperability without uniformity.” Instead of aiming for a single BRICS taxonomy or regulatory model, the member states could pursue common principles, minimum safeguards, and a greater degree of recognition of equivalence within their respective national frameworks, while still maintaining their distinct development priorities and transition paths. Mapping national taxonomies can improve comparability by identifying areas of alignment.

As India’s BRICS presidency concludes and the chairship passes to China in 2027, this provides a practical basis for continuity. The agenda is not to establish a single model of green-finance regulation, but to build a common foundation for credibility that future BRICS presidencies can then further develop, so that climate finance becomes not only more trusted but also more scalable. The overall objective is broader than preventing greenwashing: it is to create credible climate-finance systems that can support the mobilisation of capital at the scale required to meet climate and development priorities.