Tag: public

1. Purpose and Scope
The Neftaly regulatory framework aims to guide public sector institutions in integrating environmental sustainability into financial management practices. It ensures that government revenues, expenditures, and investments align with national and international climate and sustainability commitments, promoting transparency, efficiency, and accountability in green public finance.

Scope includes:

• Budget planning and allocation for green initiatives
• Accounting and reporting of climate-related expenditures
• Green procurement and investment regulations
• Monitoring and evaluation of environmental outcomes

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2. Core Principles
The framework is built on the following principles:

• Sustainability Integration: Environmental considerations are mainstreamed across all financial management processes.
• Transparency: Public disclosure of green financial allocations, commitments, and outcomes.
• Accountability: Institutions are accountable for environmental impacts and efficient use of resources.
• Consistency: Harmonization with international green finance standards (e.g., IMF, UN SDGs, Green Climate Fund).
• Risk Management: Incorporation of climate-related financial risks in fiscal planning and reporting.

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3. Budgeting and Allocation

• Governments must categorize and track green expenditures within budgetary frameworks.
• Use of green budget tagging to identify climate-positive spending and investments.
• Prioritization of projects with measurable environmental benefits and alignment with national climate targets.
• Incorporation of lifecycle cost analysis and environmental cost-benefit assessments.

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4. Accounting and Reporting

• Adoption of internationally recognized standards for green public accounting.
• Integration of environmental and social metrics into financial statements.
• Reporting on green financial performance in annual public sector reports.
• Verification of environmental claims through internal and external assurance processes.

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5. Green Public Procurement

• Establish clear criteria for sustainable procurement practices.
• Mandate the use of environmentally friendly goods, services, and works.
• Require environmental impact assessments for large-scale procurement projects.
• Incentivize suppliers to adopt low-carbon and resource-efficient practices.

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6. Monitoring, Evaluation, and Disclosure

• Continuous monitoring of green public expenditure performance against sustainability targets.
• Use of key performance indicators (KPIs) for environmental outcomes.
• Publication of periodic reports on green fiscal management to ensure transparency and public accountability.
• Integration of feedback mechanisms to improve green financial management policies.

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7. Oversight and Compliance

• Establishment of dedicated Green PFM Units in ministries of finance or audit institutions.
• Regular audits of green financial flows to verify alignment with policy objectives.
• Enforcement mechanisms for non-compliance with green budgeting, accounting, and reporting standards.
• Capacity building for public officials to implement, monitor, and report on green financial management.

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8. Alignment with Global Standards

• Compliance with international green finance frameworks, including:
  • UN Sustainable Development Goals (SDGs)
  • Paris Agreement and Nationally Determined Contributions (NDCs)
  • IMF Climate Public Expenditure and Institutional Review (CPEIR)
  • Green Climate Fund (GCF) fiduciary standards

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9. Continuous Improvement

• Periodic review and update of green PFM frameworks based on lessons learned, technological advances, and evolving environmental priorities.
• Adoption of digital tools and reporting platforms for real-time tracking of green public funds.
• Encouragement of innovation in sustainable fiscal policy and financial instruments.

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