We must create an environment that encourages investment in nature. Recognising the importance that the loss of biodiversity represents for the financial system, the Bank of Mexico and the Center for Latin American Monetary Studies (CEMLA) organised the conference “Biodiversity and Environmental Challenges for the Financial System” from November 30 to December 2.
During the conferences, the dependence of the financial sector on natural capital was greatly highlighted. During the fifth panel, “Success Cases and Opportunities in Financing Land Use, Sustainable Agriculture and Reforestation” Patricia Moles, specialist in Green Finance of the Bank of Mexico, acted as moderator.
Andrew Mitchel, founder and director of Global Canopy, mentioned that there is a lack of interest in agriculture on behalf of the financing areas; however, he stressed that without it, great economic problems would be generated. Regarding financing for this sector, he stated: “To change from a negative climate scenario to a positive one, investment from the private sector is necessary.”
Paulina Campos, director of the GIZ Mexico Biodiversity Programme, stated that, despite the fact that in certain regions of Mexico “there is a high investment potential to reduce water stress; the main challenge is that farmers do not have access to credits, nor do they know the procedure to obtain them.” Consequently, she mentioned that work is being done from the biodiversity programme to support farmers to access credits for irrigation systems. She concluded by assuring that these types of initiatives within the financial sector have a great positive impact when companies have a long-term plan in a given region and understand that the problem is systemic, and that they can play an important regional role regarding sustainability.
To conclude, working on clear taxonomies for biodiversity investments is essential. This will provide companies and investors with certainty about what is being financed. For this, the Taskforce on Nature-related Financial Disclosures (TNFD) has provided a framework for assessing impacts on nature.
All the forums held at this conference are recorded on Banxico’s YouTube channel.
