The Financial Regulatory Commission of Mongolia (FRC) and Nepal Rastra Bank (NRB) held an AFI-led inclusive green finance (IGF) peer learning exercise from 26-28 September in Ulaanbaatar, where Nepalese delegates learned from Mongolia’s experience in implementing IGF.

The event was aimed at supporting NRB in developing and implementing a green taxonomy – a system used to define investment sustainability – a milestone Mongolia achieved in 2019. FRC Chairman, Bayarsaikhan Dembereldash welcomed the NRB delegation and stressed the importance of IGF peer learning to mitigate global changing climate:

“Knowledge sharing among financial regulators is critical to advancing inclusive green finance and building the sustainable ecosystems needed to support climate resilience worldwide. We cannot do this alone. Moving faster than climate change means moving together.” 

The Bank of Mongolia talked through its green policy initiatives and regulatory prospects for the banking sector, with input from the Mongolia Sustainable Finance Association. The country’s Financial Regulatory Commission offered regulatory solutions for greening the sector, including Non-Bank Financial Institutions (NBFIs), the insurance sector, and capital markets. The Nepalese delegation also visited two commercial banks and one NBFI – a chance to witness the country’s private sector’s green policy adoptions in practice.

Mongolia has made great strides in sustainable finance, with a national coordination mechanism and regulatory guidelines in place. It was one of the first countries to issue a green finance taxonomy in 2019. In June this year, the Financial Stability Council (FSC) – composed of the FRC, the Bank of Mongolia, the Ministry of Finance, and the country’s Deposit Insurance Corporation – approved The Taxonomy for SDG Financing – an expanded version of the 2019 taxonomy which includes vital sectors like health and education. In 2022, the FSC also published a simplified Environmental and Social Risk Management Guideline to promote responsible financing of NBFIs and micro, small and medium enterprises.

“Peer learning is critical to AFI’s goal of expanding IGF knowledge and policy development”, explained AFI’s IGF Policy Specialist, Jeanette Moling. “This event gives Nepalese regulators the chance to learn from Mongolia’s challenges and achievements in green taxonomy development.” NRB is currently in the process of developing its green finance taxonomy with the support of AFI’s in-country implementation program. It is set to be finalized by the end of 2023.