The LACADI project opened the questionnaire for institutional investors to help determine how much progress insurance companies and pension funds in Mexico and Peru have made in incorporating climate change variables into investment decisions.
The platform, which will be open from 17 October to 13 December, is essential to advancing climate disclosure in the region. Its application will help identify the extent to which recommendations have been implemented from the Task Force on Climate related Financial Disclosure (TCFD) and the International Financial Reporting Standards (IFRS).
To participate, interested Mexican and Peruvian insurers and pension funds must nominate a delegate or responsible person, who must then register by clicking here. With this information, LACADI will share information and detailed instructions to enter the platform and participate in the process.
What are the benefits of participating in the Questionnaire?
Taking part in this process will allow participating institutional investors to report back to their companies on progress made in mainstreaming climate change opportunities and risks. Those participating will also receive a set of recommendations based on the responses to the questionnaire.
Participating organisations will also have access to support services from LACADI and can participate in capacity building and capacity strengthening activities, among other benefits.
Details about the questionnaire
The LACADI 2022 Questionnaire is composed of five sections and 63 multiple choice questions designed to identify the levels of knowledge and appropriation of the climate disclosure recommendations.
The online platform responsible for hosting the questionnaire, as well as data and response management, scoring and monitoring is carried out by a third party independent from LACADI: the National Consulting Centre (NCC), a research and consultancy centre based in Colombia, with presence in Mexico and Peru.
*The Latin American Climate Asset Disclosure Initiative (LACADI) is funded by the International Climate Initiative (IKI). The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMUV) supports this project on the basis of a decision adopted by the German Federal Parliament.
According to the Organisation for Economic Co-operation and Development (OECD), the transition to low-carbon and climate-resilient economies will need to include the private sector to help mobilise resources, knowledge and innovation. The private and financial sector have recognised the importance of their role in mitigating and adapting to climate change, as well as the importance of considering climate issues when managing investment risks.
However, companies still lack knowledge about the risks and benefits of addressing climate change for their business. Therefore, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, through the project Financing for Climate Action in Mexico (FINACC) and the Mexican-German Climate Change Alliance, participated in the first Training Workshop on Corporate Climate Action Initiatives and Instruments. The training was promoted by UK-PACT together with WRI Mexico, South Pole, WWF, the United Nations Global Compact and CDP.
The objective was to raise awareness and provide key information to companies in Mexico on the science of climate change and its implications for the private sector, as well as the opportunities to undertake decarbonisation plans for green growth and their business models.
On behalf of GIZ, Gabriela Niño, Climate Finance Advisor and FINACC project preparation officer, gave a training on the basics of physical and transition risks for a resilient and low-carbon economy in the country. During her presentation, she explained to Mexican business leaders the importance of considering physical and transition risks to climate change, which require a strategic response to address them.
Physical risks refer to damages and alterations caused by climate variability, such as heat waves, droughts, floods, storms, sea level rise, among others, which have negative impacts on companies’ supply chains and in turn affect the financial sector. On the other hand, transition risks refer to changes in policy, technological innovation and market paradigms, where, by prioritising sustainable activities that help decarbonise and build resilience in economies, activities causing climate change become stranded assets.
In Mexico, a country highly vulnerable to climate change (INECC, 2022), it is a high priority to address the risks and impacts that will produce losses for businesses, the financial sector and communities. Therefore, the work of the Task Force on Climate-related Financial Disclosures (TCFD), which seeks to provide a framework for the transparency of climate-related financial risks so that companies can provide information to investors, lenders, insurers, etc., stands out. The TCFD provides recommendations to properly assess climate-related risks and opportunities and thus green the financial system.
During the presentation, two reports were shared with the companies:
Digital tools and databases such as GIZ’s Environmental Scenario Analysis (ESA) are key elements for promoting business sustainability, managing and mitigating risks, and supporting financial decision making. These fundamental tools help financial and non-financial companies with business decisions about physical and transition risks for a resilient and low-carbon Mexico, while at the same time allowing them to move towards appropriate information management processes linked to these risks, as well as financial disclosures under ASG criteria.
Moving towards low-carbon and resilient economies requires building partnerships to mobilise green finance, achieve the goals set out in the Paris Agreement and limit the increase in global average temperature to below 1.5°C above pre-industrial levels.
Since 2019, the Mexican-German Climate Change Alliance, implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and part of the International Climate Protection Initiative (IKI), has been working hand in hand with the Government of Mexico and actors from the private, financial and social sectors to mobilise resources for concrete actions in the territory and identify the challenges and opportunities of climate finance. This long-term vision aims to allow Mexico to meet its national and international climate commitments.
In the framework of the third edition of the Green and Inclusive Finance Festival, the Mexican-German Climate Change Alliance presented the fruitful technical cooperation with the Government of Mexico to green the financial system and mobilise climate finance towards actions to address the climate crisis in the territory. The five axes of climate action were shared, in which they collaborate with various institutions from the public, financial, private and social sectors to promote green finance.
We invite you to learn more about the results of the Mexican-German Climate Change Alliance on green finance:
Promoting green finance mobilisation is key to meeting the Sustainable Development Goals (SDGs) of the 2030 Agenda and the Paris Agreement. In this context, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the Tecnológico de Monterrey organised the third edition of the Green and Inclusive Finance Festival 2022 with the aim of creating a space for multi-stakeholder dialogue to share best practices at the national, regional and international level about the allocation, access, governance, management and mobilisation of green finance.
On 13, 14 and 15 June, 24 sessions were held in a hybrid manner, with the participation of around 100 panellists and more than 2,000 online attendees from Mexico, Latin America, the Caribbean, Spain and Germany. The festival was attended by representatives of GIZ Mexico, the IKI projects in Mexico, the Tecnológico de Monterrey, the Ministry of Finance and Public Credit (SHCP), the Ministry of Environment and Natural Resources (SEMARNAT), the Bank of Mexico (Banxico), Nacional Financiera (NAFIN), the National Banking and Securities Commission (CNBV), the National Bank of Public Works and Services (BANOBRAS), the Economic Commission for Latin America and the Caribbean (ECLAC), the National Institute of Social Economy (INAES), CIBanco, among others.
The inauguration was chaired by Gabriel Yorio González, Undersecretary of Finance and Public Credit; Simone Franke, Political Counsellor of the German Embassy in Mexico; Philipp Schukat, Climate Team Coordinator of GIZ Mexico; Cynthia María Villarreal, Director of Sustainable Development and Linkages at the Tecnológico de Monterrey and Ambassador Miguel Ruíz Cabañas Izquierdo, Director of the Sustainable Development Goals (SDG) Initiative at the Tecnológico de Monterrey. To open the Festival, the speakers addressed the efforts and achievements of the bilateral Mexico-Germany cooperation for sustainable financing, the importance of multi-stakeholder cooperation in the mobilisation of financial resources and the role of universities in the greening of the financial system.
The first day of the Financing Festival addressed the social economy and impact investments, the history of change generated by the Global FELICITY Programme, decentralised financing and the efforts of GIZ Mexico, financial mechanisms for climate change and sustainable development from the public sector, the 2030 Solutions for local development, the financial inclusion of people with disabilities and the post-COVID recovery strategy of the Development Bank.
The second day’s sessions dealt with instruments to boost financing with women entrepreneurs, feminist financial policy, solar thermal energy financing, Payment by Results mechanisms, socio-economic assessments of resilient and low-carbon infrastructure projects, crowdfunding for green investment in Mexico, digital tools for project preparation and the green supply of commercial banks.
On the final day, sessions focused on the economic and financial impacts of climate change, the development of green and sustainable taxonomies in Latin America, youth in action for green finance, challenges and opportunities for energy efficiency finance, climate finance engagement at the COP, green and sustainable finance mechanisms at the subnational level, and partnerships to drive ambition in climate action.
Recognising the role of youth in climate action, the Festival also featured innovative projects selected from the open call promoted by GIZ Mexico, “Youth in Action for Green Finance“. The young people who presented their projects were Daisy Álvarez for the project Construyendo espacios verdes y sustentables para todes, Graciela Rivera with the project EnerYou, Daniela Carreón with the project ETF Verde and Iván Mendoza for the project in Mazahua communities SMAR JÑatjo’o.
To conclude the Festival, participants discussed alliances to increase climate action ambition, including the results of the cooperation between GIZ Mexico and the Government of Mexico to green the financial system. In addition, the Mexican-German Climate Change Alliance presented on the progress of the cooperation and its work with key actors to promote green and inclusive finance in the country, from the territory to the creation of sustainable taxonomies. Moreover, the SHCP and Banxico highlighted the need to move towards low-carbon and resilient economies, as well as the key role of the technical cooperation provided by GIZ Mexico in addressing climate change.
In the closing session, Philipp Schukat, Coordinator of the GIZ Mexico Climate Team, presented two key conclusions on green finance. First, that “in the face of the climate crisis we already have the technological innovation, now we have to create the financial mechanisms to implement it and reduce social gaps”. Second, he stressed the importance of multi-stakeholder cooperation between governments, civil society and businesses to achieve global goals.
