By Pilar Zapata Coloma, BIOFIN Chile. Is it possible that, when giving credit to a company, a bank or finance institution will assess the environmental risks of the project to be financed; for example, if it affects nearby communities, if it impacts native forest biodiversity, or if it has significant emissions implications?
This is one of the ten environmental tasks identified by UNDP, specifically for the transformation of environmental finance, and recommends the national financial system to adopt corporate practices on environmental sustainability. The document suggests, among other things, to adopt the Equator Principles (which regulates these practices) and to incorporate environmental considerations in productive good practices and standards of the sectors being financed that put pressure on the environment.
A specific tax on fuels for land transport and a green tax on the acquisition of new cars are financial measures taken in Chile to contribute to greater sustainability, however, it is also crucial to commit the finance sector to these practices. Chile has made some advancement in mortgage loans for green houses which are certified by the Ministry of Housing and Urban Development.
These issues were analyzed in the workshop Climate Change and Biodiversity: Risks and Opportunities for the Financial Sector in Chile, organized by the United Nations Environmental Program Financial Initiative (UNEP-FI) and the United Nations Development Program Biodiversity and Finance Initiative (UNDP-BIOFIN), within the frame of the 2030 Agenda for Sustainable Development.
The meeting, held this October and called representatives of the local financial sector. Its goal was to create awareness on the importance of climate change impacts national biodiversity and the economy, identifying the most vulnerable sectors. At the same time, tools to manage potential risks and opportunities in their business portfolios were analysed.
"Biofin Chile is advancing in the implementation of the pilots identified in the Financial Strategy. In this regard, one of the priorities of our national project team is working with the private sector and incorporate the protection of biodiversity in financial risk analysis” said Andrea Cabezas Correa, Project Coordinator of BIOFIN Chile.
UNDP recently supplied the presidential candidates of Chile with 10 environmental suggestions for an inclusive and sustainable country, which considers 43 recommendations to be considered in their election manifestoes:
- To diversify the productive matrix
- To strengthen environmental institutions
- To transform environmental finance
- To foster environmental equity and democracy
- To raise resilience and adaptation to climate change
- To accelerate energy transition
- To conserve biodiversity, ecosystems and its services
- To guarantee water security
- To diminish environmental pollution
- To promote sustainable territories
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