Within the framework of the cooperation between the Mexican-German Climate Change Alliance of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the Banking Association of Mexico (ABM), the development of a green finance taxonomy for Mexican banks is being promoted, through the design of a methodological proposal of the taxonomy system for financial institutions. Different criteria were considered to prioritize the sectors and choose the green economic activities within them that will make up the taxonomic system.

The methodology developed to prioritize green economic sectors was based on three components:

1. Environmental impact: The economic sectors that could have a greater negative or positive contribution to environmental objectives were identified –particularly those that mitigate climate change, since this topic represents the niche with the greatest opportunities and interest from institutional investors.
2. Investments: The economic sectors with the greatest investment potential were identified based on two factors: a) Economic sectors with the highest historical investment in the country, and b) Sectors with the highest flows of green financing internationally.
3. Best practices: Different international practices were observed in the matter, especially the experience derived from the North American Development Bank (NADB https://www.nadb.org/es), due to its experience of more than 20 years of green financing in Mexico. Likewise, the green financing classification methodologies already used by some Mexican banks were reviewed.

The analysis showed that the energy, transport and agriculture sectors should first be considered in the taxonomy of green finance in Mexico.

The Sustainable Finance Committee of the Financial Stability Council will be in charge of creating Sectorial Technical Groups (GTS) with experts on the evolution of their market and its environmental impacts, to generate the Technical Evaluation Criteria (CETs), emphasizing activities where greater investor interest and greening potential are expected. These will reflect the scientific evidence and will contain parameters, metrics, and thresholds to verify that the financing of these activities contributes to the fulfillment of Mexico’s environmental objectives, established in the national legal framework as well as international commitments