LAB

LABs

Innovation is a powerful tool that can help drive transformations in the region and promote investment in different sectors, and provide opportunities for progress to populations in vulnerable situations in economic, social and environmental terms.

The "LAB" is the innovation laboratory dialogue between financial and capital markets to structure and identify ways to implement innovative green and sustainable financial instruments and to promote sustainable best practices for capital markets in the region, in collaboration with development banks and state development agencies, among other actors.


 

Scope of Activities

Sustainable Finance

Exchange of experiences on financial instruments for different sectors, including transport, energy and agriculture.

Green Bonds

Promotion of instruments and the regulatory framework for the development of the local market for green and sustainable bonds and assistance to investors and issuers.

Green Banking

Support to public and private banks in developing best practices for green banking, including institutional strategies, and climate risk management..

Impact Investment

Promotes the creation of alternative financial instruments to finance investments with social impact, deepening financial solutions for local projects.


 

Where it is implemented

Brazil

Development of innovative financial solutions to leverage private investment in projects that may have social and/or environmental additionality.

Chile

Roadmap activities identification and objectives definition to integrate climate change risks into financial practices and regulation.

Mexico

Identifying financial solutions to expand private investment in green and sustainable businesses.

 

Project Map

Click icon to locate all active initiatives in the region.

 

Why LABs?

LABs allow for strategic positioning to work with the private sector and leverage influence on linkages with governments, corporations and civil society to maximize the impact of planned projects and investments.

As a platform that catalyzes innovation for inclusion in Latin America and the Caribbean, IDB Lab supports ventures and projects with the potential to generate transformational impact on populations that are vulnerable due to economic, social, gender and/or environmental conditions.

LABs connect capital resources, stakeholders and knowledge in Latin America and the Caribbean, and between the region and different parts of the world.



Innovation allows to overcome barriers that prevent green investment such as:

Scarce FinancingScarce financing for entrepreneurs.
Emerging InnovationAdolescent or emerging innovation and entrepreneurship ecosystems.
High CostsHigh costs of products or services due to insufficiently deployed technologies.

 

Success Cases

Brazil

As a result of the first year of the Brazilian LAB, three products were designed and presented, i) Energy Saving Insurance (ESI), ii) risk analysis of solar photovoltaic projects and iii) first loss fund. Read More

Chile

Green Finance Public-Private Roundtable, to outline a long-term agenda for dialogue and joint work between government, regulators and financial market institutions, to incorporate climate change risks and opportunities into their business strategies. Read More



 

Partners on the Ground

The Inter-American Development Bank has partnered with major "green" players to catalyze new investments in the Latin American and Caribbean region.

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

Additionally, the IDB has partnered with key "green" players and national development banks (NDBs) to design and promote green financial instruments in the Latin American and 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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