Colombia, with IFC's support, unveiled a series of guidelines designed to help channel financing into a range of climate-friendly projects, part of an effort to safeguard the environment and spur economic development.
The Financial Superintendence of Colombia (SFC), which oversees the country's financial sector, presented the first phase of the Colombia Green Taxonomy. The system defines what types of projects are considered "green", providing clarity to the growing number of individual and institutional investors interested in environmentally friendly investments.
The classification system is expected to spur the growth of "green" capital markets by funneling public and private investments into climate-friendly projects. That is considered crucial with the world facing what the United Nations has called a three-pronged crisis of climate change, pollution, and species loss.
Colombia prepared the final document with the support of the World Bank, IFC, and its Sustainable Banking and Finance Network, a partnership between regulators and banking associations. The initiative, which had the support of the Climate Bonds Initiative, is part of IFC's efforts to help Colombia, and other developing countries, to mitigate and adapt to climate change and other environmental threats.
"Climate change is the defining challenge of our time, and the world must quickly ramp up funding for sustainable investments. Guidelines that provide clarity for investors, like the Colombia Green Taxonomy, are a crucial component of that effort," said Makhtar Diop, IFC's Managing Director.
"At IFC, we believe that green finance, based on verifiable standards, is key to driving change. We are proud to be working with Colombia in setting robust environmental standards for Latin America. "
"Today we present the first phase of the Green Taxonomy of Colombia, an example of our commitment to sustainability and climate smart investments. It´s also an unprecedented collaborative effort to seize the opportunity to redefine the way in which finance contributes to the construction of a greener and more inclusive society", highlighted the Financial Superintendent of Colombia, Jorge Castaño Gutiérrez.
Colombia's taxonomy is designed to be used by bond issuers, investors, financial institutions, and public and private entities, all of them seen as key to helping the country reach its development and environmental targets. Colombia has some of the most ambitious climate-related goals in Latin America and the Caribbean, having pledged to reduce greenhouse gas emissions by 51 percent by 2030.
Combating climate change is a major part of IFC's work. As of 2021, the institution had committed $9 billion to climate-related projects across the developing world while helping our clients build climate finance portfolios worth $28 billion. That has helped reduce greenhouse gas emissions by more than 100 million tons, the equivalent of taking approximately 20 million cars off the road, or of erasing the annual carbon dioxide emissions of a country the size of Chile.
About IFC
IFC a member of the World Bank Group is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
April 26, 2024
