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Green Finance

Green finance broadly refers to financial investments flowing into sustainable development projects and initiatives, environmental products, and policies that encourage the development of a more sustainable economy and a range of another environmental objective. Green finance includes climate finance but is not limited to it. Read More

 

Scope of Activities

Green Banks

Tailored support for National Development Banks (NDBs) to design and promote green financial instruments; Structuring a green financing strategy, including strengthening of its institutional capacity for NDBs.

Innovative Financial Solutions

PPPs, interconnected zones, renewable energy, energy efficiency.

Intersectoral Dialogue

Financial Innovation Labs (LABs) to promote dialogue with regulators, capital markets and financial sector stakeholders.


 

Where it is implemented

Argentina

Promote production efficiency and energy use in SMEs

Brazil

GHG emissions calculation and emission reductions of its operations portfolio
Sustainable Finance Framework
Structuring municipal PPPs in Minas Gerais to standardize and optimize the contracting process
The BDMG Sustainability Bond Framework
Brazilian Lab for Financial Innovation (LAB)
GHG emissions calculation and emission reductions of its operations portfolio
Sustainable Finance Framework
Brazilian Lab for Financial Innovation (LAB)
GHG emissions calculation and emission reductions of its operations portfolio
Sustainable Finance Framework
Institutional innovation and project management process
Brazilian Lab for Financial Innovation (LAB)

Chile

The Government of Chile is promoting the development of strategies at the national scale to promote investments in Public-Private Partnerships and green private investments, through dialogue tables between the public and the private sector (the “Green Agreement”).

CORFO will be developing and implementing innovative financial instruments and technical assistance to be deployed through Chile’s first-tier, local, financial institutions to promote private investments in low-carbon projects including renewable energy, energy efficiency and sustainable transport measures.


Colombia

Greenhouse Gas Emissions mitigation by Renewable Energy Projects in Non-Interconnected Zones (ZNI) - CO-T1409
Financing mechanisms for investment in Energy Efficiency in public lighting, promoting the replacement of low-efficiency luminaires with LED luminaires

Mexico

Dialogue for the development of financing initiatives for distributed generation
Potential of energy efficiency and renewable energy investments in the tourism sector
Financial Innovation Labs (LAB Mexico)

Paraguay

Uruguay

The Government of Uruguay will be working on the promotion of public-private dialogue to identify financial innovation and regulation to support green and Nationally Determined Contribution-related investments.


 

Project Map

Click icon to locate all active initiatives in the region.

 

Why Green Finance?

GF scales up public and private investments that provide environmental benefits, through new policies, financial institutions and financial instruments, such as, inter alia, green banks, green bonds, carbon market instruments, innovative financial technologies, labelling, guarantees for PPPs.

Investment in the green economy needs to take place on a larger scale over coming decades in order to achieve the Sustainable Development Goals and the global objectives of the Paris Agreement.



Green Finance allows overcoming barriers to green investment such as:


Regulatory FrameworksRegulatory frameworks not articulated with long-term sustainable economy
Lack of ConflictingLack or conflicting public financial incentives
Investment GapsInvestment gaps in clean and green technologies, finance for sustainable natural resource-based green economies, climate smart blue economy and circular economy.
MisaligmentMisalignment of public sector financing decision-making with the environmental dimension of sustainable development

 

Success Cases

LAB

3 years since the establishment of the LAB

Banco do Brasil is among the 10 most sustainable companies in the world

The bank was rated 1st in the ranking of financial institutions.

Banco do Brasil (BB) was considered the most sustainable financial institution in the world, and ranks among the ten most sustainable corporations in the “Global 100 Most Sustainable Corporations in the World” index, produced annually by the Canadian publication Corporate Knights. The announcement was made this Tuesday (22) during the World Economic Forum, in Davos (Switzerland).

First Certified Agricultural Green Bond in Oaxaca



 

Partners on the Ground

Who is supporting GFI

This Initiative is being promoted by the IDB with support from the International Climate Initiative (IKI) of the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB).

Furthermore, the IDB has partnered with key determined ‘green’ stakeholders and National Development Banks (NDBs) to design and promote green financial instruments in the Latin America and the Caribbean region.
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Resources
  • Stay updated on the latest trends of Green Finance

First “taxonomy” created to identify private sector solutions for investing in climate adaptation and resilience

NEW YORK, The Lightsmith Group (“Lightsmith”) today released the ASAP Adaptation Solutions Taxonomy (“ASAP Taxonomy”). This is the first peer-reviewed set of definitions and eligibility criteria specifically focused on climate adaptation solutions being offered by private sector companies. The ASAP Taxonomy was developed through the Adaptation SME Accelerator Project (“ASAP”), which is supported by the Special Climate Change Fund (SCCF) of the Global Environment Facility, Conservation International, and the Inter-American Development Bank and IDB Lab. It builds upon existing definitions and international standards around climate finance, such as the European Union’s Sustainable Finance Taxonomy, the Intergovernmental Panel on Climate Change, the Task Force on Climate-related Financial Disclosures (TCFD), and the UNFCCC Climate Technology Centre and Network (CTCN) Taxonomy, among others, in order to foster harmonization and uptake. The ASAP Taxonomy has been reviewed by a panel of global experts and is actively being applied to identify hundreds of private companies across the globe that offer climate adaptation solutions. “We need practical solutions to help us adapt to climate change now,” said Jay Koh, Managing Director of Lightsmith. A recent study by the University of Cambridge shows an additional $100 billion of global costs annually linked to extreme weather events – such as floods, heatwaves and droughts – can be expected by 2040. The UN Environment Program estimates the cost of adapting to climate change in developing countries alone could rise to $140 to $300 billion per year by 2030, and between $280 and $500 billion per year by 2050. Despite the fact that 75% of all national climate plans under the Paris Agreement reference climate adaptation, adaptation received less than 6% of the total $579 billion of climate finance in 2017/2018, with perilously little from the private sector, according to the Climate Policy Initiative. “Identifying companies that can help manage drought, flood, wildfire, supply chain disruption, disease, and other climate impacts is a critical first step to building resilience to climate,” added Koh. “Most of these companies do not call what they do ‘climate change anything’ but if we can find them, we can invest in and scale up their solutions as the challenge of climate change grows.” ASAP recognizes the important role that small and medium-size enterprises (“SMEs”) can play in supporting climate adaptation. SMEs generate at least 45% of employment and as much as 33% of GDP in developing countries. The ASAP Taxonomy offers a systematic approach to identify SMEs that produce technologies, products, and services that support adaptation to climate change (“Adaptation SMEs”) and enables investors and governments to target investment and support. “The timing of the new ASAP taxonomy is crucial. With SMEs in developing regions and especially Latin America and the Caribbean confronting both the economic fallout of the pandemic and worsening climate impacts, we should take full advantage of this new taxonomy to support them to continue to capitalize on the business opportunities to develop solutions for climate adaptation and resilience,” said Graham Watkins, Climate Change Division Chief of the Inter-American Development Bank. The ASAP Taxonomy specifically focuses on SMEs in developing countries but can be easily extended to apply to businesses of all sizes, operating in all geographies. The ASAP Taxonomy is comprised of (i) a definition of an “Adaptation SME”, (ii) eligibility criteria to determine what types of companies qualify as an “Adaptation SME”, (iii) classification systems for climate adaptation solutions, and (iv) a results framework to measure, monitor and report on climate adaptation- related outcomes. The ASAP Taxonomy can be used by investors, funders, companies, and other stakeholders to: -Identify climate adaptation investments, thereby enabling more accurate tracking and reporting; -Sets out a menu of classification approaches for categorizing, tracking, measuring and reporting climate adaptation solutions based on the technology, product, service provided; -Inform companies on how their solutions may support climate adaptation and resilience; -Provide initial guidance on approaches for measuring companies’ contributions to climate adaptation; and; -Create a framework that can be used to align climate adaptation and resilience investment strategies with international standards and definitions. “The release of ASAP Taxonomy is an important contribution to increasing private sector investment in climate change adaptation. Through a common language, the taxonomy will help classify climate adaptation business solutions and eventually support investors and SMEs understand market opportunities and track investments. The taxonomy’s focus on Adaptation SMEs will contribute to climate resilient and inclusive global economic recovery from the COVID-19 pandemic”, said Chizuru Aoki, Lead Environmental Specialist and Manager of the Least Developed Countries Fund and the Special Climate Change Fund. “The ASAP Taxonomy is a significant step toward building the case for climate adaptation as an investment asset class and mobilizing much needed capital flows to adaptation-focused SMEs,” said Agustin Silvani, Senior Vice President of Conservation Finance at Conservation International (CI). “Both investors and businesses will benefit from a better understanding of the scope of climate adaptation investing. CI congratulates Lightsmith and all involved in the production of this valuable resource.” By using the ASAP taxonomy, investors, funders, companies, governments, and policymakers can enhance the supply and uptake of climate adaptation solutions globally, and especially in the places where they are needed most. The full ASAP Adaptation Solutions Taxonomy can be downloaded here.


Events


BIODIVERSITY IN ENVIRONMENTAL IMPACT ASSESSMENT

This course provides a knowledge base on accepted good practices for the effective incorporation of biodiversity into the...



 

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