Content

About the Climate Bonds Initiative

1. Report Summary 3

Climate Bonds is an international organisation
working to mobilise global capital for climate
action. It promotes investment in projects
and assets needed for a rapid transition
to a low-carbon, climate-resilient, and faireconomy. The mission focus is to help drive
down the cost of capital for large-scale climate
and infrastructure projects and support
governments seeking increased capital
markets investment to meet climate andgreenhouse gas (GHG) emission reduction
goals. Climate Bonds conducts market
analysis and policy research; undertakes
market development activities; advises
governments and regulators; and administers
a global green bond Standard and Certification
scheme. Climate Bonds screens green finance

2. Introduction and overview 4
3. Methodology and scope 5
4. LAC sustainable finance market analysis 7
5. Key sustainable finance policy development
milestones in LAC 19
6. Spotlight on emerging key features 23
a. Sustainability-linked bonds 23
b. Blue economy 23c. Adaptation and resilience 24
7. Country overviews and deep dives 26
8. Outlook 35
9. Appendix - List of A&R keywords forscreening of Climate Bonds databases 36

instruments against its global Taxonomy todetermine alignment, and shares information
about the composition of this market withpartners. The Climate Bonds team has also
expanded its analysis to other thematic areas,such as social and sustainability bonds via
the development of screening methodologies
for investments that give rise to positivesocial impacts and added resilience. This
scheme is underpinned by rigorous scientific
Criteria to ensure that Certified bonds andissuers are consistent with the well-below 2˚Ctarget of the Paris Agreement. Obtaining andmaintaining Certification requires initial andongoing third-party verification to ensure theassets meet the metrics of sector Criteria.

About the Inter-American Development Bank Group
List of acronyms
A&R: Adaptation and resilience
ABS: Asset-backed securities
CBS: Climate Bonds Standard
CBS v4: Climate Bonds Standard Version 4
CCS: Carbon capture and storage
CGT: Colombian Green Taxonomy
DNSH: Do no significant harm
DM: Developed market
EM: Emerging market
ESG: Environmental, social, and governance
EU: European Union
FDI: Foreign direct investment
GBDB: Green Bond Database
GBP: Green Bond Principles
GBTP: Green Bond Transparency Platform
GDP: Gross domestic product
GHG: Greenhouse gases
GSS: Green, social and sustainability
GSS+: GSS, SLB, and transition
ICMA: International Capital Market Association
ICT: Information and communication
technologies
IPCC: Intergovernmental Panel on Climate Change
KPI: Key performance indicator
LAC: Latin America and Caribbean
MDB: Multilateral development bank
NDC: Nationally Determined Contributions
PPP: Public and private partnerships
SDG: Sustainable development goals
SLB: Sustainability-linked bond
SLD: Sustainability-linked debt
SMEs: Small and medium-sized enterprises
SNAT: Supranational issuers
SPT: Sustainability performance target
SRI: Socially responsible investment
S&S: Social and sustainability
SSBDB: Social and Sustainability Bond Database
UNDP: United Nations Development Programme
UoP: Use of Proceeds
YOY: Year-on-year

The Inter-American Development Bank
Group (IDBG) is devoted to improving lives.
Established in 1959, the IDBG is a leading
source of long-term financing for economic,
social, and institutional development in
LAC. The IDBG also conducts cutting-edge
research and provides policy advice, technicalassistance, and training to public and private
sector clients throughout the region.
The Inter-American Development Bank (IDB)
is a multilateral development bank (MDB)
that aims to promote economic and social
development in the region. It provides loans,grants, and technical assistance to countries,
with a focus on reducing poverty andinequality, fostering sustainable growth, andimproving infrastructure.

IDB Invest is the private sector arm of the IDBGroup, which provides financing and advisory
services to private companies, financial
institutions, and governments, with the goal ofpromoting sustainable and inclusive economic
growth in the region.
Both the IDB and IDB Invest play importantroles in supporting economic and social
development in LAC, with the IDB focusing on
public sector development and IDB Invest on
private sector development. Together, theywork towards the common goal of reducing
poverty and inequality, and improving the livesof people in the region.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative2

Report Summary
The green, social, sustainability, sustainabilitylinked, and transition (GSS+) bond markets
in Latin America and the Caribbean (LAC)
have experience sustained growth since their
inception in 2014 reaching a cumulative total of
USD154.1bn to the end of 2022. Despite acontraction in volumes in 2022, the GSS+ segment
maintained its 5% share of global debt capital
markets, with the GSS+ market in LAC accounting
for an impressive 21% on average of the region’s
debt.1 This reflects the vulnerability of LAC
economies to the impacts of climate and socialecological interdependencies, and the need for
substantial investment in transition technologies,
which is being met by large issuers who havetapped global appetite for ESG investments.
The LAC GSS+ labelled market had a record
year in 2021 with USD63.3bn issued mainly
in response to the COVID-19 pandemic andrepresenting 34% of the local debt market. In
2022, labelled instruments accounted for 25%of the USD40.8bn from the region. However,
persistent financial barriers for the local capital
markets remain (e.g., currency risk, lack ofliquidity and project risks), and the LAC market isthe source of only 4% of global GSS+ debt.
Since Climate Bonds’ Latin America andCaribbean (LAC): State of The Market 2021, three
new countries have joined the Sovereign GSS+
Bonds Club and volumes in the region reacheda cumulative USD49.9bn across 30 green,social, sustainability and sustainability-linked
sovereign deals. Sovereigns have contributed
to the development and promotion of themarket with supportive policies, regulation,and the establishment of local taxonomies toincrease guidance for the market. Colombia(2022) and Mexico (2023) have already publishedtheir taxonomies, while Chile, the Dominican
Republic, Brazil, and Uruguay have signalled thedevelopment of their own frameworks.

Government leadership through policy andtaxonomy developments, along with sovereignissues, will support the growth of the LAC
sustainable debt market, predominantly indeals supporting decarbonisation, and at muchgreater scale. The LAC GSS+ market continues
to consolidate, with the sustainability theme
representing the largest share in cumulative
volume of this market, accounting for 35% of thelabelled market. Within the social sphere, there isa growing trend in Gender Equality bonds, aimed
at improving women’s well-being and reducing
gender inequalities. The region’s high exposure
to climate change effects already locked into thesystem, and the nature of its primary economic
sectors makes adaptation and resilience (A&R)
considerations an imperative in every project
and asset. Given the extent of the marine
ecosystem covered by LAC, the dependenceon ocean-based activities is expected to be adriver of capital flows financing the sustainable
management of the blue economy, focussing on
marine resources, conservation, and measures
to mitigate the negative impact of economic
activities from private players.
An increased focus on definitions and standards,
innovative instruments, disclosure from issuers,
and utilisation of emerging labels such as SLBs
and transition instruments, will support futurefinancing opportunities in the debt capital
markets. In this context, multilateral institutions,such as the IDB Group, and LAC governments
have a crucial role in promoting the local
GSS+ markets through leveraging effective
policy interventions, enhanced transparency,
and market innovation, coupled with key
demonstrative issuances.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative3

Introduction and overview
About this report
This is the third iteration of Climate Bonds
Initiative’s (Climate Bonds) State of the Market
series for the LAC region. The report describes
the shape and size of labelled GSS+ debt
issued by LAC domiciled entities to the end of
December 2022. The market analysis is enhancedby an overview of key policy developments,
trends, guidance, and growth opportunities
for sustainable finance in LAC. The objectiveof this report is to provide analysis andrecommendations to support the growth of thesustainable finance market in the region.
The previous update on this market was
published in September 2021, and at the endof June that year Climate Bonds had recorded
GSS+ debt volume of USD48.6bn originatingfrom the region.

Introduction to the report
The global sustainable finance market has
experienced rapid growth in recent years, withinvestors increasingly seeking to align theirportfolios with investments that have a positive
impact on the environment and society.
Although GSS+ instruments remain a small
fraction of the global debt market, their share
as a proportion of the LAC debt market is fivetimes greater. Increasingly, investors are keen
to support instruments meeting the required
standards of clarity and transparency. Climate
Bonds ongoing pricing studies consistently
demonstrate that green and other types ofsustainable bonds can attract cheaper financing
because of a supply shortage.2

This report aims to contribute to the growth of
the sustainable finance market in the LAC region
by providing guidance for issuers, regulators,
and investors, and highlighting examples ofbest practice. The GSS+ market in the LAC
region remains relatively small, reflecting theunderdeveloped domestic capital markets,with a few exceptions in larger countries. Theinternational market is limited to a handfulof LAC issuers with the capital needs to raiselarge scale finance in hard currencies. The LAC
region faces multiple challenges in confronting
the climate emergency while working towards
social, economic, and institutional progress. The
green and just transition perspective is a unique
opportunity to address vulnerabilities and growmore inclusively, protecting natural capital with
innovative policies and prioritising sustainability
factors in decision-making.
LAC is fortunate to possess abundant natural
resources, presenting numerous opportunities.
The region boasts substantial reserves of two
crucial metals essential for electrification: copperand lithium. Additionally, it contains some of
the world’s sunniest and windiest locations,which could potentially produce gigawatts of
inexpensive electricity to generate and export
green hydrogen. Therefore, the region is currently
experiencing an enormous technological surge
and attracted more private capital during the firsthalf of 2021 than Southeast Asia.3

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative4

Methodology and scope
Methodology overview
This report is based on thesustainable debt market as definedby debt instruments included in
Climate Bonds databases. Climate
Bonds screens labelled deals forinclusion in its Green Bond Database (GBDB),
Social and Sustainability Bond Database(SSBDB), and SLB and Transition Database. To
qualify for inclusion, debt instruments must havea label. Green, social and sustainability bonds
must finance sustainable projects, activities, or
expenditures, while complying with Climate Bonds
GBDB Methodology or Climate Bonds SSBDB
Methodology, according to their label. SLBs andtransition bonds must respectively annunciate
clear and ambitious transition sustainable
performance targets (SPTs) for the entity, have
UoP earmarked for activities that are not low- or
zero-emission but have a short- or long-term roleto play in decarbonising an activity or supporting
an issuer in its transition to Paris Agreementalignment. Debt labels describe the types ofprojects, activities, or expenditures financed,
and/or their benefits. Green, social, sustainability,
and transition are the most common labels, but abroad range of labels is used.
Climate Bonds tracks labelled debt instruments inthe market and reports on them. For the purposeof this report, only bonds and other widely usedsecurities in the LAC region, such as asset-backed
securities (ABSs), have been included. Labelledloans are not covered in this report.
The Climate Bonds database review and screening
process is ongoing, and deals are added as soon as
the required information is available to the screening
team. Consequently, some figures and data mayvary from this report to the Global State of the Market
2022 published in April 2023. While this reportprimarily relied on desk-analysis, Climate Bonds also
incorporated information from conversations andinterviews conducted with key stakeholders in the
LAC region throughout the report’s development.
The disparities in data used for this report, whencompared to other sources, can be attributed
to Climate Bonds minimum eligibility criteria,
including disclosure, for data incorporation into
its GB and S&S databases. Furthermore, thereport does not only include data available up
to the end 2022 but also incorporates relevant
information such as new policy developments,
initiatives, and taxonomies that have occurred
during 2023 up to this report´s publication date.

Country definitions and amounts
In this report, country refers to the country of
the issuing entity, while in the Climate Bonds
GBDB, country refers to the country of risk, which
may produce differences compared with other
Climate Bond reports.

Climate Bonds does not track the LAC
conventional debt market so additional
information, excluding structured finance deals,
was taken from Bloomberg.

Scope of analysis
This report is an evaluation of the
GSS+ debt market in LAC up to
December 2022, which includes
cumulative data since market
inception in 2014.

Labelled deals are debt instruments used
to finance projects, assets, and activities
that support climate change adaptationand mitigation or other clear sustainableobjectives. They can be issued by governments,
municipalities, banks, and corporates and thelabel can be applied to any debt format. It is
global best practice for bonds to be issued inline with the corresponding principles of theirlabel (as described in the methodologies below),
as well as several country-specific guidelines
when seeking a label. The key consideration isDefinitions and examples of labels in each theme

GreenSocialSustainability

SLBs

Transition

Dedicatedenvironmental benefits(captured
since 2021)

Dedicatedsocialbenefits(captured
since 2020)

Greenand social
benefits
combined
into one
instrument(captured
since 2020)

Couponstep-up/stepdowns linked
to entitylevel SPTs
(captured
since 2021)

UoP
supportingtransition at
activity orentity level(captured
since 2021)

Blue

Affordable
housing

ESG

Sustainabilitylinked

Transition

ClimateEducationGreen
innovation

ESG-linked

Blue transition

Green

Genderequality

Positive
impactSDG-linked

Greentransition

Green (carbon
neutrality)

Health/Healthcare

Sustainability

Social impactlinked

Low-carbon
transition

RenewableenergySDG housing

Sustainability
awareness

Social &sustainabilitylinked

Solar

Town
revitalisation

SDG

KPI-linked

Environmental

YouthSocially
responsible
investment

Water

Employment

LGBTQ+

PACE (Property
Assessed
Clean Energy)

OrangeGreen
innovation

Sustainability

ImpactImpactSDG

SocialClimateresilience
ImpactLatin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative5

that UoP is ring-fenced to finance only green
assets, projects and/or activities or linked to theachievement of their STPs.

• Social: UoP is exclusively related to social
projects, e.g., health, employment, genderequality, affordable housing, etc.

Five sustainable debt themes are explored, basedon the projects, activities, and expenditures
financed: green, social, sustainability, SLB, andtransition. Each of the labels included in thereport and examples of labels qualifying for eachtheme are described below.

• Sustainability: UoP includes a combinationof green and social projects, activities, or
expenditures, e.g., renewable energy, lowcarbon, transport, employment generation andgender equality.

Label definitions andcomposition
Green: All deals in the green
theme have been screened
to verify the integrity of theirgreen credentials. Screening
is based on a set of processrules stipulated in the Climate
Bonds GBDB Methodology, including carrying
a label and all net proceeds verifiably (throughpublic disclosure) meeting Climate Bonds’ green
definitions derived from the Climate Bonds
Taxonomy.4,5The methodology is consistent withICMA´s definition of green bonds stated in theGreen Bond Principles (GBP), which provide highlevel categories for eligible green projects, andrecommends the reporting on UoP.6
Social and sustainability:
Social and sustainability (S&S)
deals are classified based on
the UoP (which is typicallyrelated to the deal’s label), as
follows. To be incorporated
into the Climate Bonds
Social and Sustainability
Bond Database (SSBD), eachbond´s UoP is classified
against the relevant social UoP
categories (see page 15), must clearly identify anappropriate target population, and the proceeds
must not include any categories that could beconsidered to breach the minimum climate
safeguards.7 Equally, the SSBD methodology is
consistent with ICMA´s Social Bond Principles(SBP) and Sustainability Bond Guidelines (SBG)
providing high level categories for eligible
projects and recommended reporting on UoP.8,9

Any instrument financing only green projects is
included in the GBDB should it meet eligibility
requirements, irrespective of its label (e.g., an
SDG bond that only finances solar energy). A
sustainability-labelled bond that only finances
social projects will fall under the social theme,
whereas one that finances a combination ofgreen and social would be considered to fallunder the sustainability theme.

As criteria are developed, Climate Bonds will
update its GBDB methodology and then begin
screening bonds from issuers in those sectors
for inclusion, whether labelled as transition or as
green. The Climate Bonds Taxonomy defines theassets and activities that are aligned with a 1.5°C
pathway, accepting financing with either label. In
2022, Climate Bonds launched Criteria for Basic
Chemicals, Cement, Hydrogen Production, andSteel. Entities operating in those sectors can now
refer to the Criteria to determine the appropriate
assets, projects, expenditures etc. for inclusion ina green or transition bond.

Sustainability-linked bonds:
SLBs raise general purpose
finance and involve coupon
step-ups or, occasionally,
step-downs linked to theachievement of pre-defined,
time-bound SPTs. Climate Bonds has developed
a screening methodology for SLB structures,
based on the Five Hallmarks for Credibly
Transitioning Companies, assessing the ambitionof the SPTs through alignment and credibility
with a sector-specific 1.5°C pathway.10 ICMA´s
Sustainability-Linked Bond Principles (SLBP) also
incentivise the achievement of KPIs and SPTs.11
Transition: Climate Bonds
records but does not screentransition bonds. A transitionbond has UoP earmarked
for activities that are notlow- or zero-emission (i.e.,
not green), but have a short- or long-term role toplay in decarbonising an activity or supporting
an issuer in its transition to Paris Agreementalignment. The transition label enables inclusionof a more diverse set of sectors and activities,
and includes labels such as blue transition andgreen transition. At present, transition bonds
predominantly originate from highly polluting,and hard-to-abate industries such as extractives
like mining; materials such as steel and cement;
and industrials including aviation and shipping.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

6

LAC sustainable finance market analysis
10. Bermuda
USD1.1bn, 1 issuer, 2 bonds

2. Mexico
USD32.3bn,
48 issuers,
126 bonds

16. Dominican Republic
USD320m, 2 issuers, 2 bonds

8. Guatemala
USD2.3bn, 4 issuers, 4 bonds
20. El Salvador
USD20m, 1 issuer, 1 bond

12. British Virgin Islands
USD780m, 2 issuers, 2 bonds

15. Belize USD364m,
1 issuer, 1 bond

18. Barbados
USD81.7m, 2 issuers, 2 bonds
19. Trinidad and Tobago
USD44.2m, 1 issuer, 1 bond

11. Costa Rica
USD1bn, 7 issuers, 9 bonds
14. Panama
USD379m, 4 issuers, 14 bonds

4. Supranational
USD25bn*, 10 issuers, 72 bonds

3. Brazil
USD31.9bn,
133 issuers,
234 bonds

13. Ecuador
USD780m, 8 issuers, 8 bonds
7. Colombia
USD2.8bn, 24 issuers, 41 bonds*Supranational entities are organisations or
authorities that go beyond the boundaries
of a single country, representing a higher
level of cooperation and decision-making
among participating countries which can
include regional development banks,international agencies, among others.

5. Peru
USD6.5bn, 12 issuers, 15 bonds

17. Paraguay
USD300m, 1 issuer, 1 bond

Cumulative GSS+ bonds
By the end of 2022, cumulative
green, social, and sustainability debt
originating from LAC had reached
USD126.8bn, a 160% increase sinceJune 2021 (USD48.6bn). Transition andsustainability-linked bonds, included
for the first time in this regional analysis,
add a further USD27.3bn. By the end of2022, the LAC GSS+ market had reached
USD154.1bn.

9. Uruguay
USD1.8bn, 6 issuers, 7 bonds
1. Chile
USD43.2bn,
27 issuers,
60 bonds

6. Argentina
USD2.8bn, 26 issuers, 48 bonds
TOTAL
USD154.1bn, 284 issuer, 652 bonds

Source: Climate Bonds Initiative
Green, Social and Sustainability, SLB and Transition Databases

Countries in the LAC GSS+ market by volume issued
Argentina USD1.1bn
Barbados USD73m
Brazil
USD7.2bn

2022

Dominican Republic USD20m
Ecuador USD160m
El Salvador USD20m
Guatemala USD1.1bn

Costa Rica USD156m
Colombia USD0.8bn
Chile
USD8.1bn

MexicoUSD13.9bn

British Virgin Islands USD0.8bn
Argentina USD1.8bn
Barbados USD8.5m
Bermuda USD1.1bn
20142021
0%

BrazilUSD24.7bn

Supranational
USD5.9bn

Ecuador USD0.6bn
Guatemala USD1.2bn

Belize USD364m
Uruguay USD353m

Dominican Republic USD300m
Costa Rica USD0.9bn
Colombia USD2bn

Panama 380m
Paraguay 330m
Peru USD5.9bn

Chile
USD35.1bn
20%

Trinidad and Tobago USD44m
Uruguay USD1.5bn
Peru
USD0.6bn

40%

Mexico
USD18.4bn
60%

Supranational
USD19.1bn
80%

100%
Source: Climate Bonds Initiative

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

7

LAC percentage in the global GSS+ market

GSS+ percentage over the
total vanilla market in LAC
2019

GSS+ share %*Global 95.5%
LAC 4%

8%

2020

14%

2021

34%

2022

25%

In LAC, the sustainable debt market share of thetotal debt issued year-on-year (YOY) is larger than
the global average. While global GSS+ debt has
maintained 5% of global capital markets volume
over the past couple of years, thematic debt
originating from LAC accounted for approximately
21% of the regional USD535bn volume between
2019 and 2022.12 This demonstrates the shifting
priorities of issuing entities in the LAC market.
Thematic debt instruments can attract capital tosupport the regions vulnerability to environmental
and social shocks. This suggests that the thematic
debt markets in the region will continue to grow.
The Russian invasion of Ukraine caused energy
price spikes, driving high inflation. The expectations
and consequences of rising interest rates rapidly
hit the debt market, and issuance in all categories
of bonds declined in 2022, which extended tobonds bearing thematic labels (-24% YOY).
The sustainability label accounts for 35%of the GSS+ market, with USD54.4bn.
Development banks account for 37% of thisamount, with sovereign issuers at 35%. The
largest sustainability bond issuers in theregion are the supranational IDB Group withcumulative volume of USD14bn, and the Mexican
Government, with USD7.7bn. In 2022, Mexico
had the largest sustainability bond market in theregion with cumulative issuance of USD17.8bn
mostly from sovereign bonds (43%) andgovernment-backed deals (26%). The growing
relevance of sustainability bonds is driven by theincreased flexibility they offer to issuers as their
UoP can be allocated towards both green andsocial projects.
Green is the second largest label, withcumulative volume of USD42.4bn by the end of2022, and 40% growth over the last 2.5 years.
Non-financial corporate issuers made the largest
contribution (53%) followed by sovereigns(19%). The largest green issuer was the Chilean
Government with four deals worth USD7.4bn, andthe country has the second largest green bondmarket in the region (USD12.7bn). The largest
green market in the region is Brazil (totalling
USD15.2bn spread out over 86 bonds).

Cumulative

Global 96%

0%

20%

40%

60%

80%

100%

Source: Climate Bonds Initiative
This percentages come from the calculations based on the juxtaposition of Climate Bonds database and2023 Bloomberg Finance L.P. debt capital market data.

GSS+ in LAC reached USD154.1bn
60

Green

SocialSustainability

SLB

Transition

63.3bn50

40.8bn40

30
26.9bn20

USD Billions

Year

LAC 4.5%2022

12.5bn10

10.4bn0
20142018

2019

2020

2021

2022
Source: Climate Bonds Initiative

LAC GSS+ market share per label

2022

Green
13%

SLB
23%

Social12%

Sustainability
51%

Transition >1%
20142021
0%

Green
28%
20%

SLB
17%

Social
19%

40%

60%

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

Sustainability
35%
80%

100%

Source: Climate Bonds Initiative8

Transition
Guidelines
The Japanese Ministry of
Economy, Trade, and Industry(METI) published the Basic Guidelines on
Climate Transition Finance in 2021, which
serve as an example for LAC on how topromote more transition-labelled issuances.
These guidelines have contributed tomaking Japan one of the largest transitionthemed markets globally, as a result ofstrong policy support.13
Aligned with ICMA’s Climate Transition
Finance Handbook they propose four key
elements for disclosure best-practice:• Strategy and Governance;• Environmental Materiality;• Science-based Strategies; and• Transparency.
To accompany the guidelines, relevantJapanese Ministries have been developing
sector-specific roadmaps for carbonintensive industries, such as chemicals, ironand steel, aviation, oil, and gas.
Policy frameworks such as these could be
deployed to add momentum to transition
finance efforts in LAC countries, trigger theachievement of national climate goals,
and assist local entities to design andcommunicate credible transition plans.

The social label experienced the mostremarkable growth, recording an increaseof 247%, with volumes reaching USD29.9bn by
the end of 2022, compared with USD8.6bn inJune 2020. This growth can be attributed to thesocial bonds issued to finance social needs in
response to the COVID-19 pandemic. Once again,
sovereigns and development banks were thesource of the most of the volumes (65% and 20%
respectively). The largest social issuer was theChilean Government with twelve deals totalling
USD18.5bn, contributing to Chile’s pole position
as the country originating the largest social
volume in the region (USD19.3bn).
Transition bonds and SLBs debuted in themarket in 2019 and 2020 respectively. The
transition theme is in its infancy, representing
0.5% of the region’s GSS+ market, with threedeals and combined volume of USD770.4m.
The dissemination of definitions and guidelines
on transition is still necessary to scale up thismarket. Climate Bonds is currently developing
standards and sector criteria for defining credible
transitions. Other institutions also provide
guidance for transition finance, such as ICMA´s
Climate Transition Finance Guidebook or OECD´s
Guidance on Transition Finance.14,15

Currencies in the LAC GSS+ market

The SLB segment has flourished in LAC, with
USD26.5bn. The average YOY increase of 238%
for the last three years is consistent with theglobal average, lagging behind only Asia-Pacificand North America. The SLB market in LAC isdominated by non-financial corporates (82%)
yet encompasses the only two sovereigns in
the world. The two largest issuers in the region
are Suzano with three deals amounting to
USD2.75bn and the Chilean Government, which
pioneered the sovereign SLB label in early 2022,with its debut USD2bn deal. The largest LAC
country source of SLBs is Brazil with USD11.9bn.

Local currencies 38%
2022
2014Local
2021
currencies
23%

Hard currencies make up 74% of the total
LAC GSS+ market. USD, EUR, CHF, GBP, and JPY
have maintained a consistent presence in theregion. Hard currencies were the source of 72% of
green bonds, 75% of sustainability deals and 80%
of SLBs, while social bonds were slightly lower
at 67% of the volume. Entities in the LAC region
issuing sustainable securities tend to utilise
hard currencies when accessing international
capital markets, given their stability and wider
acceptance in global financial transactions. This
also allows them to tap into a larger pool ofinternational investors and potentially benefit
from increased liquidity and lower borrowing
costs. Additionally, hard currencies facilitatecross-border transactions and simplify theprocess of raising funds on international markets
by reducing the need for currency conversion

International currencies
77%

International currencies 62%
Source: Climate Bonds Initiativeand eliminating some of the risks associated withexchange rate fluctuations. The development oflocal debt capital markets in local currency canhelp reduce the volatility of issuers profits due
to external currency movements. It also reduces
the dependency of the private sector on externalborrowing and protect economies from capitalflow volatility.

Currencies in the LAC GSS+ market
International currencies

Local currencies

100%

80%

60%

40%

20%

0%
2014

2015

2016

2017

2018

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

2019

2020

2021

2022

Source: Climate Bonds Initiative9

Types of issuers in the LAC GSS+ market through the years

LAC countries have embraced sovereign
GSS+ issuance, with a cumulative
USD49.9bn at the end of 2022, a 442%
increase on the USD9.2bn that had beenrecorded in June 2020. Chile is a GSS+ bondmarket pioneer and as of mid-2023 was the
only sovereign to have issued across the green,social, sustainability, and SLB themes, for total
volume of USD34.5bn. In 2020, Climate Bonds
published the Sovereign Green, Social, andSustainability Bond Survey based on interviews
with 22 issuers of sovereign GSS bonds. During
the interviews, 16 Issuers repeatedly remarked
that local green market creation was both amotivation for and outcome of sovereign GSS
bond issuance. The activity of issuing a thematic
deal sends a signal to the market that the
government is committed to transition, which
attracts crowding in from the private sector.

Financial
Corporate 9%
2022

Government-Backed Entity 7%
Local Government >1%

Development
Bank 17%

Non-Financial
Corporate 32%

Financial
Corporate 6%
20142021

Government-Backed Entity 5%
Local Government 1%

Development
Bank 21%
0%

20%

Sovereign34%

Non-Financial
Corporate 35%
40%

Sovereign
32%

60%

80%

100%

Source: Climate Bonds Initiative

The Sovereign GSS+ Bond Club has solid membership in LAC

The sustainability and social themes havedominated LAC sovereign issuance. In March
2022, Chile became the first sovereign globally toprice an SLB. In November, Uruguay priced thefirst SLB with a step-down feature (see Uruguay’s
case study). Brazil has signalled its intention tojoin the Sovereign GSS+ Bond Club and would
become the eighth country in the region to do so.

LAC Sovereigns

Totalamount issued

Green (16%)

Social (39%)

Sustainability (38%)

Sustainability-linked (7%)

Numberof deals

Chile

USD7.4bn

4Colombia

USD549.4m

4

Chile

USD18.5bn

12

Ecuador

USD400m

1Guatemala

USD500m

1

Chile

USD6.5bn

4

MexicoUSD7.7bn

9Peru

USD4.4bn

2

Chile

USD2bn1

Uruguay

USD1.5bn

1Issuances by country, label and public or private sector
Green Public sector

Green Private sector

Sustainability Public sector

Social Public sector

Sustainability Private sector

Social Private sector

Transition Public sector

SLB Public sector

SLB Private sector

Transition Private sector

100%

80%

60%

40%

20%

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

ua
y
To
ba
go
Be
liz
e

l

ug

na
Tr
in

id

ad

an

d

Ur

at
io

Pe
ru

pr
an
Su

s

lo
m
bi
Co
a
m
s
ta
in
ic
Ri
an
ca
Re
pu
bl
ic
Ec
ua
do
El
r
Sa
lv
a
Gu dor
at
em
al
a
M
ex
ic
o
Pa
na
m
a
Pa
ra
gu
ay
Do

Co

n
rg
i
Vi
sh
iti
Br

Ch
ile

nd

Is

la

il

a

Br
az

ud

os

rm

Be

rb
ad

Ba

Ar
ge
n

tin

a

0%

Source: Climate Bonds Initiative10

Market analysis by label

LAC green issuance by year

Green

Uruguay

Supranational

In 2022, green bonds
amounting to USD5.3bn
originated from LAC, a 48%
decline on the prior year,
reflecting the broader global market slowdown.
By the end of the year, cumulative issuance in theregion had reached USD42.4bn, representing 4%of the total LAC market in 2022.

Ecuador

Dominican Republic

British Virgin Islands

The LAC green bond market is dominatedby non-financial corporates (53%) andsovereigns (19%). Financial corporates haveincreased their volume (USD2.1bn to USD4.5bn)
adding 2% to their market share since 2020, now
totalling 10%. Development bank market sharehas declined by 4%, amounting to only 11% of
the green market at the end of 2022, compared to
15% at the end of 2020. Local governments havethe lowest green market share with only 1.5%, adecline from 2.3% in 2020.

Costa Rica
Bermuda

2014

2015

2016

2017

Source: Climate Bonds Initiative

Argentina

2018

2019

2020

2021

2022

Source: Climate Bonds Initiative

LAC green issuance by type of issuer
Sovereign

Non-Financial Corporate

Development Bank

Local Government

Financial Corporate

Government-Backed Entity

100%
80%
60%

20%

Ar
ge
nt
Ba ina
rb
ad
Be os
r
Br
m
iti
ud
sh
a
Vi
B
ra
rg
z
in
Is il
la
nd
s
Ch
Co ile
lo
Do
m
Co bi
m
in
st a
ic
an a Ri
Re capub
Ec lic
ua
Gu do
r
at
em
al
M a
ex
i
Pa co
na
m
a
Su
Pe
pr
an
r
at u
io
n
Ur al
ug
ua
y

0%

Source: Climate Bonds Initiative

The up to 5-year bucket includes 102
smaller bonds, where 21 deals with tenors
longer than 20 years are largely represented
by the Chilean sovereign (30%).
USD
58%

Barbados

0

The largest share of the volume is in the
5–10-year maturity bucket (31%), closely
followed by 10-20 years (30%). The average
ticket size of the 66 bonds in the 10-20Y bucket islarger because three sovereign green bonds from
Chile constitute 39% of its volume.

BRL
21%

Chile

2

Currencies in the green
bond market

EUR
12%

Colombia

4

40%

Other
6%

Guatemala6

USD was the currency of choice for green deals
originating from LAC (57%), which demonstrates
a regional market preference for tapping
international demand for green assets. Among
local currencies, BRL had the largest share with
USD9bn (21%), demonstrating the importance of
the Brazilian domestic market. EUR, which is thepreferred currency for green deals globally, wasthe third largest currency in the region with 12% of
the amount issued, spread over six transactions.

COP 3%

Mexico8

USD Billions

followed by Mexico with a volume of USD3.3bn.
Since June 2020, Guatemala, the British Virgin
Islands, Dominican Republic, and Bermuda havejoined the green bond market.

BrazilPanama10

Brazil topped the ranking with a total volumeof USD15.2bn, boosted by numerous deals
from non-financial corporates. Chile was
the second largest source with USD12.7bn,

Peru

External reviews, prepared by a recognised
independent party advising on theconformity with the conceptual frameworkand compliance, are a common best practice
adopted by 89% of LAC green bonds byvolume. The Second-Party Opinion (SPO) is themost popular external review type covering 77%
of volume at the end of 2022. Ratings and Climate
Bonds Certifications have declined slightly since2020, finishing 2022 at 6% and 5% respectively.

Since the inception of this market, SPOs haveadvanced the transparency and reporting
methodologies of green bonds, particularly
across sectors where scientific thresholds andcriteria were still emerging. The market continues
to embrace these external reviews, which
incorporate Climate Bonds Criteria and local
taxonomy thresholds, offering cost-effective,
tailored solutions for clients. The transparency
and credibility of an SPO or Certification is themarket standard for communicating the robust
credentials of deals to investors.
Sustainalytics remains the main external
review provider for both SPO (39%) andcertification (64%) modalities. Moody’s ESG
Solutions (formerly Vigeo Eiris) continues to be
the second largest external reviewer largely due
to their work on the Chilean and Colombiansovereigns that corresponds to 83% of theirgreen market share. Having market leaders

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

11

CASE STUDY Colombia’s sovereign green bonds

Proceeds from the sale of the bond will be used
to fund a portfolio of 27 expenditures in six
categories, which reference the United Nations
Sustainable Development Goals (SDGs):
providing an SPO to a larger share of the market
can be positive in providing investors withmore consistent information and harmonised
methodologies, which by nature, multiple secondparty consultations would not be able to deliver.
Conversely, having more external review providers
would support the healthy and ambitious growthof the market, stimulating more competitive
pricing and enhancing the standard of reviews.
Fortunately, the emergence of regional review
providers has bolstered the local market.

Green UoP
Buildings 6%

20
Greenium (pbs)

15

10

5

21

27

/1

0/

21

21
25

/1

0/

21

0/

/1

23

21

/1

0/

21

21
19

/1

0/

21

0/

/1

17

15

/1

0/

21

21
13

/1

0/

21

0/

/1

11

09

/1

0/

21

21
07

/1

0/

21

0/

05

/1

0/

21
03

/1

0/

/1

01

/0

9/

21

0

29

Colombia modelled Germany’s twin bondstructure, whereby a vanilla bond is
priced sharing similar characteristics toa corresponding green bond. This makes it
possible to directly measure the impact of thegreen label, and Colombia’s sovereign green
bond has consistently traded inside its vanilla
twin in the secondary market (7 to 15 bps).
This suggests high investor appetite for a large,
liquid, COP instrument bearing the green label,
supported by the fact that almost 32% of thedeal was placed with offshore funds.

Colombian sovereign green bonds trade inside vanilla twinsin the secondary market

Greenium (pbs)

In September 2021,
Colombia became the first
country in the LAC region
to price a sovereign green
bond in local currency
with its debut COP
denominated deal. The COP2.1tn (USD549m)
2031 maturity was placed via three auctions.
The first clip was originally COP500bn but
upsized to COP750bn when it was 4.6 times
oversubscribed. The subsequent auction was
oversubscribed by 1.5 times apiece.

Source: Ministry of Finance and Public Credit

1. Water management, sustainable use, andsanitation – 40%
2. Clean and sustainable transportation – 27%
3. Ecosystem services and biodiversity – 16%
4. Non-conventional energy sources, energy
efficiency and connectivity – 14%
5. Waste and circular economy – 2%
6. Sustainable, low-emission agricultural
production adapted to climate change – 1%

In August 2022, Colombia’s green financing
framework was updated to reflect the
Colombian Green Taxonomy (CGT) wheneverpossible and a broader scope by including
social and sustainable issues with IDB
support. Both the framework and thetaxonomy are consistent with European
practices and the government’s strategic
sustainability priorities.

The top three SPO providers in the region,
Moody’s ESG Solutions, Sustainalytics, and NINT,
provide 83% of the green SPOs. However, only
27% of the reviewed deals were in local currency,
namely BRL, CLF, COP, MXN, and PEN.

Bonds, the EU, and countries such as Mexico
and Colombia have taxonomies that provide
examples of UoP categorisations. The sector ofa bond issuer is unrelated to the UoP categories.
For example, a bank (financial sector) can issue
green bonds with Energy or Transport UoP.

Sectors and Use of Proceeds categories
The sector of a bond describes the economic
activity of its issuer. The International Standard
Industrial Classification, and the North American
Industrial Classification System (NAICS) are
examples of sector classification standards. The
UoP category describes how the funds raised fromthe sale of the instrument will be deployed. Climate

Following global trends,
renewable energy continues
to be the most funded UoP
category. The fact that renewableenergy must increase to 70-85%
of electricity generation by 2050 to limit global
warming to 1.5°C, means it is essential to

Adaptation 1%

Green use of proceeds and emission percentages
SectorTransport
23%

Water
5%

Renewable
Energy52%

Land Use
10%
Industry 1%
Waste 2%Emission % of
global CO2 emissions

Use of Proceeds %Energy29.3%

52%

Transport

25.8%

23%

Buildings

11.5%

6%

Land Use

11.3%

10%

Waste

3.2%

2%

Industry

19%

1%

Other (including Water
and ICT)

0.2%

5%

Source: Climate Bonds Initiative

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative12

accelerate the deployment of renewable energy
solutions to meet the growing demand while
reducing emissions.17 LAC´s geography provides
massive potential for solar and wind farms, andhydropower facilities to generate electricity. Any
issuer with scope 1 or 2 emissions could price abond with Energy UoP.
Low-carbon transport andbuildings can address thechallenges posed by population
growth and increasing energy
demand while reducing carbon
emissions. Both sectors havealready identified pathways todecarbonisation, and with the easeof implementation and maturity ofsolutions, they have reached cost parity.
The main obstacle to complete decarbonisation
lies in scaling up these solutions. The green
bond market can support this, hence zero-carbon
solutions should be prioritised. Green transport
policies will enable decarbonisation,
provide varied investment opportunities ingreen private transport, expand public transport,
and enable self-powered mobility, and green
public procurement is an obvious way to support
this. Net-zero transport will be delivered bysystem redesign, not solely technology switchingand electrification.
Water is a crucial resource forlife, but the latest report from the
IPCC paints a troubling picture
regarding its availability, especiallyin LAC which is one of the mostvulnerable regions.18 Today, half the global
population faces water insecurity at least oncea month. Investments in water infrastructure,
distribution, and treatment must increase
and there are green sector criteria available tosupport the prioritisation of this.19
The waste industry can reduce
global GHG emissions by 1015% through waste prevention,
recycling, and energy recovery.
This can manifest through reduced
emissions from landfill, resource extraction, andproduction, while also providing an alternative
energy source. The waste sector in Latin America
faces unique challenges due to inadequate
infrastructure, and limited resources andregulations, leading to environmental and healthhazards. Regions and local authorities could tap
the GSS+ market to support efforts in sustainablewaste management.
Land Use. Forestry, agriculture,bioenergy and food production
activities are key contributors tothis sector. LAC is an important
agriculture producer as it is theworld largest net food exporting region andalso home to the Amazon rain forest, which
has vast potential to sequester carbon and

New Climate Bonds sector Criteria for UoP bonds

Steel

Basic Chemicals

CementHydrogen

Mitigation
criteria
Adaptation& resilience

foster biodiversity if managed sustainably.20
LAC countries are already looking at developing
low-carbon agriculture as part of their climate
commitments. Most of this market is fundedthrough bilateral loans. However, these could
be aggregated and recycled in the sustainabledebt market, freeing up lender capital for further
investment. Climate Bonds' Brazil Sustainable
Agriculture, State of the Market 2022 report
identifies actions to support the expansion of the
securitisation market which could be scaled andreplicated across the LAC region.21
Industry and Information andCommunication Technologies(ICT) play a crucial role in thetransition towards a low-carbon
economy. The development anddeployment of low-carbon technologies andpractices, such as energy-efficient processes andmaterials, renewable energy integration, andcircular economy models, must be prioritised.
Similarly, the ICT sector has great potential toreduce emissions through digitalisation andthe use of smart technologies. The measures
outlined in national industrial policy are also
relevant, and if clear decarbonisation pathways
are lacking, governments should focus on
funding R&D and encouraging early-stage
investment in innovative technologies.
The success of the transition
to net-zero emissions relies
on systemic decarbonisation
through the electrificationof all economic sectors. The
more activities that are defined, the easier itwill be for borrowers to identify sustainable
development opportunities, and for lenders toprioritise sustainable UoP. These two actions in
combination could lead to rapid growth in the
GSS+ bond market. By mid-2023, Climate Bonds
had criteria to define suitable UoP in 19 sectors
including: Solar Energy, Wind Energy, Industry,
ICT, Electrical Grid and Storage, Forestry, Land
Conservation and Restoration, and Shipping. In
2022, criteria for Steel, Cement, Basic Chemicals,and Hydrogen were introduced, and Climate
Bonds is prioritising work on three new sectors:
Crop and Livestock, Value Chain, and Fisheries.

Transition
Transition bonds
originating from the LAC
region amount to 1% of the
GSS+ volume, or USD770m
spread over three deals.
In comparison, globally,
the transition label represents 5% of the total
GSS+ market. However, given that this label isusually applied to debt coming from entities
operating in the hard-to-abate sectors such as
metals and mining, it has huge potential forfurther penetration in the region. Two out of thethree transition bonds have come from Brazilian
non-financial corporates: one from Marfrig in
2019 for USD500m and the other from Eneva
in 2020 issued in two tranches for BRL948m(USD170m). The other transition bond camefrom the IDB which issued a USD100m bond in
2021 to support companies with climate-related
commitments, practices for technologicalchange, and effective climate measures. The
average tenor of these bonds is 5-10 years, andall of these have an SPO either from Moody’s ESG
Solutions or NINT.
Having clear definitions of which activities canuse the transition label will support market
growth for this sector. Such definitions canalso support the creation of credible transition
plans and sector-specific roadmaps for carbonintensive industries.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

13

LAC social issuance by year

By the end of 2022, cumulativesocial bond issuance fromthe LAC region had reached
USD29.9bn, a 247% increaseon the USD8.6bn that had been recorded by
Climate Bonds in June 2020. The social theme
accounts for 19% of the LAC GSS+ market.

Most (95%) of the LAC social bond issues
obtained an SPO. Moody’s ESG Solutions was themain SPO provider in the region with 71% of themarket share, which included Chile’s sovereignsocial deals, followed by Sustainalytics with 20%.

MexicoGuatemalaColombia

Chile

BrazilArgentina

15
12
9
6
3
0
2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: Climate Bonds Initiative

LAC social issuance by issuer typeSovereign

Non-Financial Corporate

Development Bank

Local Government

Government-Backed Entity

Financial Corporate

Not-for-Profit

100%
80%
60%
40%
20%

l
To
ba
go

na

u

d
an

Tr
in

id

ad

Su

pr
an

at
io

Pe
r

m
bi
a
Co
st
a
Ri
ca
Ec
ua
do
Gu
r
at
em
al
a
M
ex
ic
o
Pa
na
m
a

lo

Ch

Br
az

tin

ile

0%

Source: Climate Bonds Initiative

Currencies in the LAC social
bond market

USD is the dominant currency for social bonds
originating from LAC, with 35% of the total(USD10.4bn) while EUR accounts for 25%(USD7.5bn), followed by PEN with 11% (USD3.3bn).
Shorter dated paper prevails in the LAC social bondmarket with 34% of the total volume having a maturity
shorter than 5-years, while 26% and 21% fall into
the 10-20 year and 5–10-year buckets respectively.

Panama

18

Ar
ge
n

Inclusion of social bonds in the Climate Bonds
SSBDB depends on the declared UoP, which isclassified against the relevant eligible categories for
assets, projects, and activities (e.g., food security).
Each bond must clearly identify an appropriate
target population, i.e., the group(s) of people thatwill benefit from the UoP. Moreover, the proceeds
should not include any categories that can beconsidered to breach minimum climate safeguards.
A detailed classification of the UoP used for the
analysis can be seen in the table below.

Peru

Costa Ricaa

Most social bonds originating from LAC
have multiple UoP. Of all social bonds
originating from LAC, 18% of UoP is earmarked
for employment and training, amounting to
USD5.5bn. This is followed by equality (15%),
education and microfinance (each have 13% of
the UoP) with other social categories making up
the rest of the social bond market share.

Supranational

Co

Chile (USD18.5bn), Guatemala (USD500m), andEcuador (USD400m) are the only sovereigns
globally to have priced social bonds, and as aresult, sovereigns are the largest issuer type in
LAC with a cumulative volume of USD19.4bn(65%). They are followed by Development Banks,with USD5.9bn accounting for 20%.

Ecuador

USD Billions

Chile continues to lead the ranking with
USD19.3bn followed by Mexico, which was thesource of USD3bn, and Colombia with USD1bn.
In 2022, there was an increase in social bonds
originating from Mexico which accounted for 43%of the market through nine deals, surpassing theamount issued by supranationals the same year
(USD1.5bn). Many LAC countries have joined thesocial bond market since June 2020, including
Argentina, which has done more than ten deals
since then, followed by Costa Rica and Trinidad
and Tobago, both with a single social bond eachfrom a local financial corporate.

Trinidad and Tobago

ilSocialOther
19%

UoP in the LAC social
bond market

Equality
15%

USD
35%

MXN
10%
PEN
11%
EUR
25%

SocialA&R Healthcare
10%10%
Employment& Training
19%

Affordable
infrastructure
13%
Education
Food
13%
security
Microfinance
8%
14%Source: Climate Bonds Initiative

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

Source: Climate Bonds Initiative

14

Analytical Framework for classifying use of proceeds
ICMA SBP (2019 version)

Climate Bonds
Initiative social andsustainability use ofproceeds category

Social assets, projects oractivities

Access to essential services(e.g., health, educationand vocational training,
healthcare, financing, andfinancial services)

Education• Education infrastructure• Education equipment• Educational activities• Research and development

Healthcare• Medical equipment
manufacturing• Healthcare infrastructure• Healthcare services• Research and development

Employment andtraining• Vocational training• Job creation• Job retention• Welfare and wellbeing

Employment generation
including through thepotential effe ct of SME
financing and microfinanceMicrofinance• Financial services for microand small-sized enterprises• Poverty alleviation

Food security

Food security• Food availability• Price stability

Affordable basic
infrastructure(e.g., clean drinking
water, sewers, sanitation,transport, energy)

Non-green affordable
infrastructure• Energy• Transport• Building• Waste• Others

Affordable housing

Non-green affordable
infrastructure• Housing

Socioeconomic
advancement andempowerment

Equality• Gender equality• Human rights

Social adaptation andresilience (A&R)• Crisis response• Creating more robust social
systems

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

Gender as social UoP
Women in LAC face
important social andeconomic challenges withviolence against womena significant problem.
Women also face underpayment
in every sector of employment
and are more exposed to informal
terms of employment. In the field ofentrepreneurship, women also encounter
difficulties accessing finance, restricting
their capacity to make investments needed
to contribute to productivity and growth.
They also continue to be underrepresented
in leadership positions, hindering
their advocacy for full and effective
participation and equal opportunities.
These inequalities could be tackled bymobilising finance towards three gender
UoP: 1. companies led or funded by
women, 2. implementing gender-inclusive
policies and legislation and 3. developing
activities promoting the empowerment of
women. Gender-lens investing has been
incorporated into a variety of investment
vehicles such as index funds, exchange
traded funds and private equity.
The gender UoP category sits underneaththe social bond label, and can be applied
to deals addressing gender inequality
to mobilise private capital towards theadvancement and empowerment of
women.22 To date, LAC is the leading region
in gender bond issuance accounting
for over half of all gender bonds issued
globally. IDB group is a leader in fostering
financial innovation towards promoting
gender equality, diversity and inclusion(EDI) through gender bonds.
By the end of 2022, IDB Group had
supported a total of eight gender bondissues with a cumulative volume of
USD470m. In 2022, IDB Invest participatedin three local gender bonds issued by
the private sector including Ecuador’s
first gender bond, a USD100m deal from
Banco Pichincha. On the public side, the
IDB supported Mexico’s first gender bond,issued by FIRA, aiming to expand theresources available to finance projects led
by women in rural areas.

15

Sustainability

LAC sustainability issuance by year

The flexibility to incorporatea wider range of green andsocial UoP to the sustainable
framework attracts moreissuers and has supported thegrowth of the label. Since thelast Climate Bonds LAC market update in June
2020, issuers from Barbados, Belize, Costa Rica,
Ecuador, El Salvador, Paraguay, and Uruguay
have joined the sustainability bond market.

Development banks and sovereigns dominate
the LAC sustainability market with 37% and 35%of the market share, respectively.
USD was the preferred hard currency with 62% of
the total volume (USD33.9bn), followed by EUR
with 7% (USD3.7bn). MXN is the local currency
with the largest presence in the LAC sustainability
market, with 18% of the volume (USD10.2bn),
which reflects the presence of a deeper local
sustainable bond market in Mexico.
The LAC sustainability bond market largely
comprises shorter tenors. Tenors of up to 5-years
account for USD23.7bn, of which 56% belong tosupranationals, namely IDB and IDB Invest. The
5-10-year bucket was dominated by Mexican
issuers with a 53% market share of this ticket sizeand USD6.5bn issued.
Maturities ranging between 10 to 20 years,
totalling USD13.3bn, are led by sovereign deals(77%). Seven deals totalling USD4.6bn are longer
than 20 years, which is understandable giventhat investors would more comfortably invest in
long-dated sovereign than long-dated corporate
debt. Sovereign bonds are often seen as safer
investments because they are backed by the full
faith and credit of the issuing government. This
reflects the perception of lower risk and higher
stability associated with government issuerscompared to corporations, which highlights theimportance of creditworthiness and investor
confidence when considering investment options
with extended maturities.

BrazilChile

Colombia

EcuadorEl Salvador

MexicoParaguay

Peru

Uruguay

Belize2019

2020

Costa Rica
Supranational

16
12
8
4
0
2016

2017

2018

2021

2022

Source: Climate Bonds Initiative

LAC sustainability issuance by typeSovereign

Non-Financial Corporate

Development Bank

Local Government

Government-Backed Entity

Financial Corporate

Not-for-Profit

100%
80%
60%
40%
20%
0%

Ar
ge
nt
i
Ba na
rb
ad
os
Br
az
il
Ch
Co ilelom
Co bia
st
a
Ri
c
Ec a
ua
d
El
Sa or
lv
ad
or
M
ex
i
Pa co
ra
gu
ay
Su
Pe
pr
ru
an
at
io
n
Ur al
ug
ua
y
Be
liz
e

The second largest share of LAC’s
sustainability volume originated from
Mexico (32%) with USD17.8bn. The Chilean
sustainability bond market is the third largest,
representing 15% of the region’s sustainability
volume with USD8.5bn.

Barbados

20

USD Billions

The LAC sustainability market ended 2022with cumulative volume of USD54.4bn.
Supranational deals constituted this label’s
largest share (33%), comprising bonds from theCentral American Bank for Economic Integration(CABEI) (USD30m), the IDB (USD14bn), and IDB
Invest (USD4bn).

Argentina

Source: Climate Bonds Initiative

Most of the LAC sustainability bond deals
obtained an SPO (90%). Only seven deals did notdisclose an external review.
Moody’s ESG Solutions and Sustainalytics werethe main SPO providers of the region covering
52% and 29% of the market, respectively.

Currencies in the LAC sustainability
bond market
GBP 4%BRL 2%
Other
6%

EUR
7%

MXN
19%

USD
62%

Source: Climate Bonds Initiative

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative16

Sustainability Use of Proceeds
The green UoP with the largest allocations fromsustainability deals were, Energy (17%), Water(16%) and Buildings (14%). The most frequently
cited social UoP were Affordable Infrastructure(19%), Employment and Training (15%) and
Healthcare (14%).

Social UoP of LAC
sustainability bonds

Adaptation 4%

Equality
11%

Sustainability-linked bonds
By the end of 2022, thecumulative volume of SLBs
originating from LAC reached
USD26.5bn representing 17%of the GSS+ market, compared
to only 5.4% globally. The
largest local market was Brazil with 45%(USD11.9bn) of the regional amount, made up
of 37 deals from 26 corporate issuers. Mexico
followed with approximately 30% (USD8.1bn)of LAC market share across 25 deals from 15
corporate issuers. Chile was the third largest
source, contributing USD2.5bn from two deals,
including from its sovereign (80% of its local
market). The increase in SLBs in the region can be
attributed to the growing demand from dedicatedinvestors seeking portfolio diversification.

Currencies in the LAC SLB market

MXN
8%Social
A&R
10%

ICT
6%

Healthcare
14%

Renewableenergy17%

Industry
10%

Employment& Training
15%

Affordable
infrastructure
19%

Buildings
14%

Land use
12%

Education
11%

Waste
10%

Food
security Microfinance
12%
8%Transport
11%

Water
16%

Source: Climate Bonds Initiative

Source: Climate Bonds Initiative

Issuance in the LAC SLB market by year
Argentina

Supranational
Costa Rica

Brazil

Chile

Peru

Dominican Republic

MexicoUruguay

Colombia
Guatemala16

The LAC SLB market is dominated by nonfinancial corporates (82%), followed by sovereigndeals from Chile and Uruguay comprising 16%. It
mainly consists of issuers with a presence in debt
capital markets which were looking to advancetheir sustainability strategies.

12

8

USD Billions

Hard currencies are preferred, with 72%
denominated in USD, and 8% in EUR. Relevant
local currencies include BRL with 11% and
MXN with 8%. General-purpose UoP, a featureof sustainability-linked instruments, allows
corporate issuers to raise larger ticket sizes
helping to meet international investor appetite.
Longer tenors dominate the SLB market, with thetwo sovereign deals falling into the 10-20-year
maturity bucket.

Green UoP of LAC sustainability
bonds

4

0
2020

2021

2022
Source: Climate Bonds Initiative

Issuance in the LAC SLB market by country
Sovereign

Non-Financial Corporate

Government-Backed Entity

Financial Corporate

100%
80%

EUR
8%

60%

BRL
11%

40%
20%

Do

Source: Climate Bonds Initiative

m

y
ua
ug

u

Ur

Pe
r

co
M
ex
i

ic
at
em
al
a

ub
l

Gu

in

ic
an

Re
p

Ri

ca

a

Co
st
a

lo

m

bi

ile
Co

Ch

Br
az

tin
Ar
ge
n

il

0%

a

USD
73%

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

Source: Climate Bonds Initiative17

Almost all the SLBs (97%) obtained SPOs, which
provided assurance for investors given that
the SLB is still a relatively new asset class, with
Sustainalytics and ISS ESG the main opinion
providers. The former was responsible forreviewing USD13.8bn across 29 deals in theregion, including both SLB sovereigns, while thelatter reviewed 15 deals totalling USD7.3bn.
GHG emission reduction targets were included
among key performance indicators (KPIs) for
47% of the deals, with most including two scopesof emissions, meaning that close to half had
not included any mention of GHG reductions.
Renewable energy (9%), waste (8%) and corporatesocial (7%) KPIs were the next largest categories.
Scope 3 emissions were referenced by 26%(USD3.3bn) of the volume linked to emissions.
These included two bonds from Simpar(USD625m and BRL450m (USD83.8m)), and deals
from Movida (USD800m), Natura Cosméticos(USD1bn), Globo Comunicação e Participações SA(USD400m), and Arcos Dorados BV (USD350m).
Most of the deals originating from LAC are alignedwith ICMA’s Sustainability-Linked Bond Principles,and -in lesser volume- with the Science-basedtargets provided by the Science Based Targets
initiative (SBTi), which focus on setting a standard
for emission reduction targets that could becomea benchmark.

SLB KPIs

GHG emission scopes
Social 2%
ESG Score 2%

Biodiversity 6%
Renewable
EnergyWater 9%6%
Corporate
Social 7%

Three Scopes
20%
No
emissiontarget47%

GHG
Emissions
47%

Waste
8%

Circular Economy 4%
Energy Efficiency 3%

Two Scopes
28%

Only One Scope 5%

Source: Climate Bonds Initiative

KPIs alignment to
ICMA’s Principles

Source: Climate Bonds Initiative

KPIs alignment to SBTi

Not Aligned with ICMA’s
SLB Principles 2%

N/A 1%

Alignedwith SBTi
36%

Bancolombia: First bankto issue an SLB in LAC
Bancolombia, the largest private bankin Colombia with a presence acrossCentral America, was the first LAC financial
institution to price an SLB. The structuringof the COP640bn deal was supported by IDB
Invest and LAGreen Fund. This SLB includes
two KPIs:
KPI 1: Number of individuals given accessto credit.
SPT: 1,506,580 un-banked orunderserved low-income individuals
given access to credit.
SPT observation date: 31 December 2025
KPI 2: Intensity reduction of financedof CO2 emissions.
SPT: Reduction of intensity CO2 financed
emissions to a 0.0238-ton CO2e/COP
million level.
SPT observation date: 31 December 2025
Failure to achieve each SPT would incur a
coupon step-up of 17.5bps for the residual lifeof the bond.23 The private placement obtained
an SPO from Sustainalytics confirmingalignment with ICMA´s SLB Principles. IDB
received COP334bn, IDB Invest COP206bn,
and the LAGreen Fund COP90bn.

Not Alignedwith SBTi
63%

Aligned with ICMA’s SLB
Principles 97%
N/A 1%
Source: Climate Bonds Initiative

Challenges and barriers
to growth
Reportingcommitments are
one of the main
challenges forthematic issuers in
the LAC market.
Thematic debt issuers
globally face challenges in meeting reporting
commitments. The absence of clear guidelines
and frameworks for reporting creates uncertainty,
heterogeneity and hinders the fulfilment ofreporting obligations. Regions with larger
markets tend to present more robust issuing
practices, including reporting commitments.
More specifically in the LAC region, issuers
often lack clarity regarding the specific detailsof what information is material for investors

Source: Climate Bonds Initiativeand how to report in a consistent way. For
instance, in 2021, when Climate Bonds analyseda sample of the market, only about half of Latin
American issuers reported the allocation ofproceeds post-issuance.24
Overcoming this challenge requires thedevelopment and employment of standardised
reporting frameworks and providing issuers withclear guidance on the information they need todisclose. Initiatives such as IDB’s Green Bond
Transparency Platform (GBTP), which centralises
and harmonises data disclosure, are crucial toproviding the market with greater transparency.
The LAC region is vulnerable to external
shocks, uncertainties, and economic
deceleration from key commercial partners
such as China. This has diluted the potential ofmacroeconomic policy to address economic
recovery and protect the most affected groups

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative18

while looking to solve environmental challenges.
It is estimated that 32.1% of the LAC total
population live in poverty, and 13.1% in extreme
poverty, putting enormous pressure on public
sector resources.25
The current political trends in theregion are expected to continue in 2023,
with slowing growth, higher interest rates,
falling commodity prices, weakened consumer
and business confidence, and struggling small
businesses. Additionally, the possibility ofunrest and political paralysis could further
erode confidence and weigh on economic
activity.26 Governmental expenditure has beentilted towards social objectives.
Given their size and reach, debt capital
markets can play a critical role in supporting
the development of a sustainable economy
by facilitating access to large-scale, and longterm financing. Climate Bonds’ green bondpricing work confirms that there are investors
willing to buy labelled debt with the required
credentials, which is driving favourable pricing
dynamics in the market. However, many
investors with a mandate to buy EM debt are
not permitted to combine currency risk andcredit risk, or consider small ticket sizes and lessliquid assets. As a result, unlocking the supplyof capital in the Latin American region remainsa challenge. While SLBs have shown promising
growth potential, most of the issuers tapping theinternational markets are already well known.
Therefore, broader adoption and increased

participation from a wider range of investors may
be necessary to fully unlock the region’s capital
supply and support the development of smaller,
lesser-known issuers.
Small and medium-sized enterprises (SMEs) in theregion, requiring modest capital, struggle to access
capital markets and obtain loans. While the global
and LAC markets decreased from 2021 to 2022,
development banks such as the IDB and the WorldBank were channelling resources to supportde-risking, finance, capital markets, banking, andbusiness services allowing more issuers to cometo market.27 MDBs have supported institutional
reforms aimed at increasing financial inclusion
for rural populations, SMEs, and other groups
that currently do not have access to formal-sector
financial services.28
Green or GSS+ tagging in the market expands theavailability of credit and funding options. In LAC,
there is a huge untapped pipeline of small-scale,sustainable projects and assets, especially inagriculture, green buildings, waste management,
distributed renewable energy, and urban
mobility that could benefit from green tagging.
The development of aggregation mechanisms
for smaller GSS+ projects could be deployed to
unlock private capital to support these types ofassets that may otherwise lack resources.
Climate Bonds recommends three actions
to address these issues. Two of therecommendations are taken from Climate Bonds
March 2023 101 Sustainable Finance Policies
for 1.5°C, research report, which outlined 101

policy levers available to government, regulators,
and central bank policy makers to facilitate
the transition to net-zero.29
1. Regulators must step in toencourage local investors’
participation in deals from local
issuers. As an example, central
banks can adjust risk weightings and reserve
requirements by including green-supporting or
brown-penalising factors to account for climate
risks (Policy 88) or adjusting green foreignexchange reserves to consider climate risk, which
can incentivise sustainable investments (Policy 82).
2. Service providers, suchas banks or securitisationcompanies, can design
innovative solutions, including
aggregation mechanisms or blended financestructures for labelled debt.
3. Stock exchanges can support
the development of GSS+
instruments by introducing
dedicated segments to showcase
best practice, etc. For instance, the Colombian
Stock Exchange launched a platform for trading
green bonds and the B3 in Brazil introduced asustainability segment for listing companies thatmeet specific ESG criteria. Through the provisionof standardisation and transparency, suchinitiatives have the potential to attract funding tosupport entities on their sustainability journeys
and bring more actors to the market, thereby
diversifying investors.

Market development support: Data collection andharmonisation for investment decisions
To reduce the challenge ofreporting commitment clarityand provide guidance andstandardisation to postissuance reporting practices,the IDB has developed the Green Bond
Transparency Platform (GBTP). This is a
useful free and public tool that collects datafrom voluntary reporting first-hand, directlyfrom green bond issuers and external reviewers,
facilitating credible, granular, and comparable
data for evidence-based decision making.
The platform supports the standardisation andharmonisation of bond reporting including
detailed UoP and environmental impact data;
methodologies used for impact calculation; andrelevant documentation such as frameworks,
verifications, and certifications. Additionally,
it reports impact through more than 200
standardised KPIs across different project
categories including renewable energy, transport,
water, biodiversity, among others. The GBTP
promotes data integrity by encouraging issuers todisclose by adhering to international standards.

The GBTP collaborates with public authorities,
stock exchanges, regulators, and academia
to support evidence-based assessments onstandards, enabling a common aspiration fortransparency and reporting. Its high-quality
data facilitates research, resulting in key
findings that contribute to the development of
the green bond market in the region.
Recognised in 2022 as the Initiative of theYear Green Bond award by Environmental
Finance, it has become the go-to platform forpost-issuance reporting in the region, withusers assessing the reporting practices bymarket peers and using the guidance material
for their own reports. Since its launch in
April 2021, the platform has included around
80% of the LAC region’s issuance volume
with more than 200 deals reported by over
100 issuers. Its flexible technical structure,designed to promote standardised reporting,and can replicated in other regions and forother types of instruments. In 2023, it was
selected as a “global good practice” example
by Oxford Economics.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

GSS+

Market development
support: Guarantees tosupport issuances.
Development banks
often provide credit
enhancement
mechanisms orinvestment guarantees
to facilitate the issuanceof labelled debt. These may include public
and private contracts, such as insurance, reinsurance, and other guarantees. By reducing
the risk and borrowing costs of the debt
issues, such mechanisms can encourage
the participation of private investors andmultiply the impact of public funds. In
addition to benefiting a single transaction,
credit enhancement of sovereign SLBs could
also have a long-term effect on a country’s
overall debt service cost reduction.30 Notable
examples include IDB Invest guaranteeing
CADU’s green bond, the first bond by ahousing development in Mexico in 2020;
the Promerica CR bond, the first sustainablebond in Panama; and the IDB’s guarantee of
the Ecuador sovereign social bond.

19

Key sustainable finance policy development milestones in LAC
Current and new policies
and regulations
While the LAC region may
not be considered a major
contributor to global
GHG emissions under
the Kyoto Protocol, LAC
countries recognise theinterdependencies between sustainability,
economic development, trade, and investment.
Aside from the 20 international environmental
agreements countries have collectively ratified
as of 2022 in LAC, the region has progressed
in integrating sustainability policies into theagendas of both private and public institutions,
whether through voluntary measures andguidelines, or mandatory requirements.31 Thisdevelopment has been facilitated through thesigning of protocols, public commitments, andthe implementation of new regulations for ESG
incorporation, including information disclosureand transparency for financial products.
The LAC sustainable finance market remains in
its nascent stages. Understandably, sustainablefinance has penetrated the more mature markets
within the region, such as Chile, Brazil, Mexico,
and Colombia. With solid policies and regulations
to support market development, smaller LAC
markets could also benefit from the growing global
momentum around sustainability investments.
Robust public and corporate policies andregulations are crucial for market development,
facilitating the transition towards a net-zero andresilient economy. The chart below presents
policy developments in the region from 2021 to2023 and reaffirms the ongoing transformation
process. As emerging markets, LAC countries canreference public policies from other countries.

Key policy milestones supporting
sustainable finance across LAC from2021 to date.
1. Market development committees:
The establishment of a market development
committee with representation from key
stakeholders can accelerate the progress ofregulatory frameworks. The introduction of moresophisticated policies can channel resources
towards a low-carbon economy.
2. National taxonomies: The developmentof criteria for sectors with a large presence
in local markets can help lenders to prioritise
green projects and increase borrower
understanding of acceptable project categories.
3. Commitments or protocols: agreed withlocal public or private entities on sustainable
initiatives can increase the adoption ofsustainability and transparency principles by
local organisations, especially in small markets.

4. Market education materials:
shared by local institutions, such as stock
exchanges, engage local market participants.
The most impactful are those aligned withinternational standards.

CASE STUDY
The merger of theColombian, Peruvian, andChilean stock exchanges

5. ESG and reporting regulations: bring rigour
and uniformity to the market.

In 2023, the regional holding company
composed of the Colombian, Chilean andPeruvian stock exchanges is expected tolaunch, becoming fully operative by 2024.
Projections estimate that it will generate
income of around USD81m and net
revenues of around USD20m, with a reachof 568 potential issuing companies. Thismerger can facilitate greater participationof companies in the capital markets,
expanding the pool of issuers committed
to sustainability and providing financial
returns for investors. The regional holding
company aims to simplify access toregional capital markets, reduce issuancecosts, diversify products and services, andprovide financial liquidity for investors,
including cross border investments in
GSS+ instruments, thereby mobilisingresources for sustainable projects. However,
harmonizing regulations and processes
across countries poses a challenge.62
Currently, a committee is discussing
the common ruleset for the holding
company´s transactions to comply withall the jurisdictions´ requirements, which
will apply to sustainability principles, ESG
considerations, and investor protection,in order to enhance transparency andaccountability in the financial markets.

Financial policy makers andregulators can steer growth
Regulations that increase
clarity, transparency, andcomparability for investors
can promote market growth.
Financial strategies should
aim to mobilise resourcesfrom both the public and private sectors. Policy
can address systemic risks to the financial
system, mitigating market failures resulting frominaccurate information, and ensure robust investor
protection, to facilitate market growth.
The risk of negative fiscal shocks increases
with frequent severe climate-related natural
disasters. This can lead to problems such as
public debt increases, investment project
delays or abandonment, and fiscal policy
instability. To effectively manage such situations,ministries, financial regulators, supervisors, andother relevant market players need accurate
information to assess the effects of climatechange on financial accounts, as well as financial
tools to manage natural disaster impacts, and agovernance framework to address fiscal risks.55

Knowledge sharing andeducation are critical
Several stock exchanges in
LAC have developed andpublished voluntary guidelinesfor GSS+ labelled issuancefor the benefit of issuers andinvestors. Such documentation
can socialise the concept of labelled debt
issuance. From an investor perspective, thesematerials focus attention on the importanceof labelled debt and introduce definitions andkey milestones. From the local issuer’s pointof view, these documents can introduce theconcept and mechanics of sustainable financeand provide guidance on the issuance process.
Examples include:
1. Lima Stock Exchange (Peru):
Green Bond Guide for Peru (2018) and the Guide
for Social, Sustainable and SDG-aligned bonds for
Peru (2021).56,57

3. The Financial Superintendenceof Colombia: Best Practices Guide for Green
Bond Issuance (2020).59
Stock exchanges can establish green segments
to increase the visibility of sustainable financeinstruments.60 The segments’ listing requirements
provide investors with transparency andreassurance that best practice has been
observed, reducing due diligence requirements.
According to the Sustainable Stock Exchange
Initiative, 38% of exchanges have ESG bondsegments.61 Capacity building can also be
provided to support the development of local
expertise in green bond verification and secondparty opinion provision. This can help kick-start
local green bond markets and reduce the cost ofobtaining verification.

2. Central American Stock Exchange(Honduras): Guide for the issuance of Green,
Social and Sustainable Bonds (2022).58

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

20

Key policy milestones supporting sustainable financeacross LAC from 2021 to date.
2021
The International
Sustainability Standards
Board (ISSB) was createdat COP26 in Glasgow with themission to develop standards
that will result in a high-quality,
comprehensive global baselineof sustainability disclosures
focused on the needs of investors
and the financial markets.32
The Greening Finance inArgentina to Combat Climate
Change Platform was launchedunder the UK PACT Programme,
aiming to improve SMEs’ accessto sustainable finance andcontribute to the greening of
the agribusiness sector.34

In Argentina, 18 banks signed
a Sustainable Finance Protocol,
with the aim of encouraging
financial institutions in the
country to implement bestpractice and international
policies that promote theintegration of ESG factors.33
Costa Rica approves a law
to promote financing andinvestment for sustainable
development through the useof thematic public offering
securities, becoming the first
country in Central America to makethe adoption of ESG investment byinstitutional investors mandatory
and to establish incentives forthematic issuers.35,36

The banks BAC Credomatic(Regional), Banco Promerica
and Coopeservidores
signed up to the Net-Zero
Banking Alliance (UNEP FI)
and Principles for Responsible
Banking (UNEP FI).37

In Chile, the Financial Market
Commission (CMF) issued
General Rule No. 461, which
incorporates sustainability andcorporate governance issues into
the Annual Reports of supervised
financial institutions.40

Paraguay launched the
Public-Private Alliance on
Sustainable Finance,
created by the Sustainable
Finance Roundtable (MFS)
which includes almost
the entire banking sector,
and the public sector.38

Chile launched the Taxonomy
of Activities Plan, which
discussed in detail the options
and costs for developing anational taxonomy.39 The
initiative commissioned a
Roadmap for Taxonomy from
Climate Bonds and the IDB.

In Brazil, the Securities and Exchange Commission (CVM)
required listed companies to indicate ESG information according
to international standards.41

2022
At COP27, 11 LAC countries
signed a joint statement on
climate finance, reaffirming theircommitment to ESG information
access and climate policies.42
Colombia was the first country
in LAC to adopt a National
Green Taxonomy, having its
development process lead by
the Superintendencia Financierade Colombia (SFC) and theMinistry of Finance (MHCP).43
The SFC in Colombia also issued
Rules 008 and 020, which require
ESG bonds to meet international
ESG disclosure standards.44

In Uruguay, the government
published a framework forpotential issuers of Uruguay’s
Bonds Indexed to Climate
Change Indicators (BIICC), basedon the five core componentsof ICMA’s 2020 SustainabilityLinked Bond Principles.45

In April 2022, pension funds
in Mexico (AFOREs) wererequired to incorporate ESG
criteria into their investment
strategies, as per the mandateof the National Commission of
the Retirement Savings System(CONSAR) regulation.47,48

The CVM in Brazil launched a
new Regulatory Framework for
Investment Funds which limits
the use of terms related tosustainable finance exclusively
to funds whose investment
policies seek to generateenvironmental benefits.50

In Mexico, the National
Banking and Securities
Commission (CNBV) launcheda tool for the voluntaryself-diagnosis of ESG andclimate-related risks byfinancial institutions.46

In Brazil, the Association of
Financial and Capital Market
Entities (Anbima) expanded
its self-regulation requirements
for fixed-income and equity
funds identification.49

In December 2022, Anbima
launched guidelines forthe issuance of labelled
GSS+ Bonds.51

2023
Launched at the III Central Banks Conference
on Environmental Risk in Mexico City, theClimate Financial Risk Center (CFRCenter)
was created as a new hub in LAC to convene
central banks, supervisory authorities, andother public and private financial institutions
National and Local Commitment
Regulation
Market Development Committee
Sustainable Finance Platforms
National Taxonomy
Guidelines

to develop best practices for managing climaterelated risks in the region’s financial systems.
It aims to encourage open discussion, build
capacity, and share knowledge and experiences
on identifying, assessing, disclosing, andmanaging climate-related financial risks.54

In the Dominican Republic,
the Dominican Associationof Multiple Banks (ABA)
joined the IFC Sustainable
Banking Network.52

In Mexico, the Ministry of Financelaunched the National Sustainable
Taxonomy, to encourage investment
in economic activities that protect theenvironment and reduce social andgender gaps.53

Methodology: a high-level overview of most relevant developments in LAC from Climate Bonds Policy
Database, based on the most relevant developments in LAC since the last Climate Bonds update. These
regulations have played a crucial role in the region, serving as catalysts for the introduction of various debt
instruments and reshaping the narrative around the financial system. They have successfully integrated
physical climate-related risks into credit risk assessments and prompted greater transparency when disclosing
information about company assets and projects. While LAC can be seen as an exemplary case for global
developments, there is also an opportunity for the region to learn from other countries that are implementing
key policies in this realm.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative21

Opportunities in policy
The transition towards a
low-carbon economy offers
opportunities to all players,
especially policy makers
who can seize the chance tosteer the real and financial
economies towards a green future. Awarenessof the benefits provided by investment in
the transition can motivate policy ambition,
supporting economic development, energy
sovereignty and bringing other benefits. However,choosing inaction will stunt growth and increase
costs. Therefore, a regulatory standard is key tochannel investments into projects contributing to
the transition.
There are three main pillars of policy to direct
capital into sustainable development needs:
1. Speed: ensure rapid action by all
decision makers,
2. Steer: tilt the whole economy to transition,
3. Simplify: clarify and streamline
sustainable investment.
In all areas of responsibility, policymakers
need to expect volatility. Delayed action,i.e., after 2030, will require more severe policies
to limit carbon emissions, sudden technology
shifts, and likely see the carbon budget exceeded
before emissions fall. Rapid transition is essential
to minimising this volatility.
Policymakers are key to this reorientation offinance flows. It is essential that all government
departments, central banks, and regulators
actively work towards transition, within aclear and coordinated policy framework. A
sustainable finance policy framework enables
policymakers to capture private finance flows
and deliver greater decarbonisation levels.
This means governments could increase theclimate ambitions of their nationally determined
contributions (NDCs) if they consider theincreased levels of finance that they are able toaccess to fund decarbonisation.63
Climate Bonds 101 Sustainable Finance Policies
for 1.5°C, referenced above, suggests policies toleverage this market. Some examples encourage
the use of green and sustainable financial
instruments through subsidies and incentives(Policy 10), and the availability of green
finance subsidies for small and medium-sizedenterprises (Policy 12). Furthermore, developed
markets can support LAC countries by providing
sovereign-to-sovereign guarantees (Policy 13),
increasing blended finance provision (Policy19), and offering green export and development
finance (Policy 23).

Mechanisms such as blended finance,de-risking guarantees, debt-for-natureswaps, and larger deal sizes can help tochannel funding to EM based issuers.
Encouraging national development banks
and setting government policies to increase
blended finance provision for green projects
can facilitate the flow of capital to riskier
projects. Development institutions assume
the higher risk (junior capital) portion ofa bond or loan which leaves a lower-risk(senior capital) portion for more riskaverse private investors. A broader range
of investors can then support green andsustainable projects in EM countries anddiversify their investments. This in turn canhelp grow the pipeline of investable projects
and enable private investment to smaller
green projects.

Taxonomies in the region
As noted in the previous
section, the developmentof national taxonomies
can contribute to local
market growth. Taxonomies
have become central to
the sustainable finance market and nationaltaxonomies enable the recognition of local
market characteristics such as dominanteconomic sectors, or areas that are crucial toenable domestic sustainability objectives.
• A green or sustainable taxonomy is aclassification system that identifies anddefines activities, assets, or investment
projects with positive environmental andsocial impacts, based on established goals
and criteria.
• A taxonomy provides clarity, transparency,
and security for financial markets by
establishing precise and consistent definitions
for sustainable activities, which in turn can
encourage investment and better tracking ofsustainability financing flows. By promoting
common green definitions across global
markets, it can be an important resource forbuilding a cohesive thematic debt market that
supports the growth of a low-carbon economy.

• The Climate Bonds taxonomy defines
the projects and assets that are alignedwith a 1.5°C pathway. It is a tool for issuers,
investors, governments, and municipalities
to establish whether they have green assets,prior to issuing a green bond. It identifies broad
areas of inclusion that are subject to further
criteria and screening.64• The Climate Bonds taxonomy is groundedin the latest climate science and has beendeveloped through an extensive multistakeholder approach, leveraging the work oftechnical and industry working groups.
• The presence of several taxonomies
provides healthy competition as eachrequires a different level of analysis andactivity detail. This promotes a more robust
assessment of the projects because it pushes
issuers to analyse their portfolios for eligible
products.65 However, international actors suchas Climate Bonds work together to ensure
there is interoperability between all regionaland national taxonomies. This is important tocreate cohesion in the structure and content bysector and activity.
• Taxonomies can be used by issuers toassess whether they have green assets,prior to issuing a green bond or by project
developers to consider their projects according
to the metrics and thresholds aligning to a lowcarbon economy.
• Actions are required to complement
and update the assets and economic
activities, as well as eligibility criteria andsometimes compliance requirements. This
incorporates governance proposals that
contemplate the strategies defined for their
updating and strengthening.
• Implementation strategies are necessary
to utilise taxonomies effectively. This
includes guidance to project developers andfinancial institutions to align their portfolios witheligible projects. Disseminating the content andapplications of a taxonomy is critical to ensure
widespread adoption and impact.
• Taxonomies can reflect any environmental
objective. Some taxonomies are sustainable,
incorporating social aspects.

• Definitions create clarity in the market,
a shared understanding of sustainable
investments, and prevent market
fragmentation. Scrutiny against greenwashingis leading issuers to settle towards climatealigned bonds, but it is crucial to showcase therewards for those putting in the effort to label
their instruments and set robust transition
agendas. Transparent UoP and pathways arenecessary to avoid greenwashing, so that
achievable material guidelines and principles
should be followed.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative22

A LAC Common Taxonomy Framework
was developed in 2022 and recently
launched in July 2023, led by the UNEP-FI,
World Bank, UNDP, CEPAL, IMF, IDB, CAD,
FAO, ISC, and Euroclima+, which has a focus
on mitigation and adaptation. This provides
a common framework to guide LAC
taxonomy developments to enhancecomparability and ensure interoperability ofsustainable finance taxonomies in theregion, while considering local specificities.

Colombia: The
Colombian Government
launched the Colombian
Taxonomy, the first in
LAC, on 11 April 2022.
The Colombian Green
Taxonomy is aligned with the country´senvironmental commitments, strategies,
and policies, ensuring compliancewith high standards of international
environmental sustainability and increasingtransparency in these investments.
It is structured to contribute to thefollowing environmental goals: mitigation
and adaptation to climate change, water
management, soil management, circular
economy, pollution prevention and control,
conservation of ecosystems andbiodiversity.
The priority sectors were selectedaccording to their economic relevancefor the country and their potential
contribution to the environmental goals;
Buildings, Energy, Transport, Water,Industry, Waste Management, Information
and Communication Technologies (ICT),
and Agriculture, Forestry, and Other Land
Use (AFOLU).

Mexico: On 16 March
2023, the Ministry of
Finance launched
Mexico’s Sustainable
Taxonomy during the ABM
Banking Convention.66
During its first stage, Mexico’s Taxonomy
focused on developing three main
objectives: climate change, contribution
to gender equality, and access to basic
services related to sustainable cities for 171
economic activities.67

Dominican Republic:
The Securities
Superintendency
launched the Green
Taxonomy in the
Dominican Republic. The
local taxonomy will model national andinternational environmental priorities,
including commitments made under theParis Agreement, and will use the European
Union as a methodological reference.68

Chile: The Ministry of
Finance is working on
the development of a
Chilean Taxonomy. In
2021, the Taxonomy
Framework was published,with input from Climate Bonds and IBD.
Interoperability with international standards
is expected, while local factors such as
hard-to-abate sectors like mining will also
be incorporated.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

Peru started
its taxonomy
development in 2023
led by the Ministryof Environment. The
country is expected to
pay particular attention
to the agricultural sector,
given its economic
importance. Panama,
which has alreadystarted its taxonomy
development, funded by
the UNEP, will focus on
the shipping sector. Bothtaxonomies, together
with the Costa Rican
taxonomy, the development of which wasannounced in early 2023, are following the
LAC Common Taxonomy framework.

Brazil is exploringa local taxonomy.
FEBRABAN, the local
banking association,
developed a taxonomy
involving a broad
range of stakeholders to provide financial
institutions with a climate risk assessment
tool but this is not an official taxonomy.
Uruguay has also announced its intention
to start taxonomy development, using aprocess in line with its neighbour Chile.

23

Spotlight on market developments
This section highlights developments that areshaping the sustainable finance landscape in
LAC delving into three key themes: SLBs, the blue
economy, and adaptation and resilience (A&R).
These topics highlight the innovative approaches
being taken to address environmental
challenges, foster economic growth, and build
climate resilience within the region.

Sustainability-linked bonds
Sustainability-Linked Debt
(SLD) comprises SLBs andloans (SLLs), both targetlinked instruments. SLBs raise
general purpose finance andinvolve penalties/rewards (e.g.,
coupon step-ups/step-downs, early repayment
obligations, etc.) linked to whether the issuer
meets pre-defined, time bound SPTs, typicallyat the entity level. By the end of 2022, 77 SLBs
with cumulative volume of USD26.5bn had been
issued in LAC. SLBs make up a much larger shareof the market in LAC than globally with 17.2%
versus 5.4% respectively. The largest market in
the region is Brazil with 37 deals amounting to
USD11.9bn and 45.2% of the volume.
SLBs can be used by a broad range of issuersbecause unlike UoP deals, the proceeds from thebond do not have to be earmarked for specificactivities. However, the SLB structure has been
criticised for a lack of ambition in the KPIs andinvestors are starting to scrutinise company
level transition plans more closely, to determine
whether issuers have robust and practicablestrategies in place. The introduction of newmarket standards such as the new Climate Bonds
Standard v4 (see box below) seeks to addressconcerns around credibility.
ICMA’s SLB principles, launched in 2020, havebeen widely deployed as they offer guidance forstructuring features, disclosure, and reporting
to enhance capital allocation to financial

Certification under the
Climate Bonds Standard
v4 (CBS v4) has expanded
beyond UoP instruments toinclude non-financial corporate entities
and their SLBs.
Launched in April 2023, the CBS v4 is a major
new development for Climate Bonds, which
has driven credible climate financing for overa decade. Drawing from its experience indeveloping detailed sector Criteria for assets,
activities and investments, Climate Bonds will
provide transparent science-based Criteria fornon-financial corporate entities, credible SLBs
and similar instruments, and assurance for

products. These guidelines, intended to promotetransparency, are currently aimed at market
participants, but in the future will also scope
sovereign issuers.69 ICMA has also published an
Illustrative KPI Registry which includes highlevel recommendations and examples for theselection of KPIs which continue to be reviewed
together with their SLBP public consultation.70
At of the end of 2022, Climate Bonds observedthat most SLB KPIs pertained to the reduction ofscopes 1 and 2 GHG emissions.71

Blue economy
The blue economy refers
to the sustainable use ofwater-bodies resources for
economic development,
improved livelihoods, and job
creation while preserving thehealth of water-bodies ecosystems, such as rivers,
lakes, oceans, etc.72 It includes many activities,i.e., fisheries and aquaculture, marine renewableenergy, biotechnology, tourism, shipping, andcoastal development.73 In addition to recognising
the economic potential of the water bodies,
especially oceans, the damage caused by
overfishing, water pollution, and climate changemust be acknowledged, which all threaten thehealth of the ocean and coastal communities.
Goal 14 of the United Nations’ SDGs recognises
current marine ecosystem challenges.
The LAC region, with several coastal andisland states, holds vast potential for thesustainable expansion of the blue economy.
Its large ocean area accounts for 60% or moreof the sovereign territory of 22 countries in theregion, and a coastline extending over 70,000km
contains a rich marine biodiversity and many of
the region’s largest urban and rural areas.74
Promoting the blue economy involves
prioritising sustainable use of water-bodies
resources through policies, practices, andinvestors that sustainability requirements havebeen met in respect of any Certified issuance.
This work goes beyond sectoral transition
pathways and includes key governance elementsthat indicate a company’s preparedness totransition to net-zero. Certification will beavailable for corporates with emissions alreadynear zero as well as those with activities inhigh-emitting sectors, providing the corporate
has suitably ambitious performance targets
and credible transition plans. CBS v4 enables
corporates aligned with 1.5°C pathways, or
those that will be aligned by 2030, to obtain
Certification. SLBs issued by and in respect of theactivities of qualifying non-financial corporates
can also be Certified under the CBS v4.85

governance.75 This includes investing in research andinnovation for the development of new technologies,
such as ocean waste recollection and off-shore windfarms, ocean-based activities, improving ocean
governance and marine biodiversity protection.
Oceans are one of the world’s major reservoirs of
biodiversity. They constitute more than 90% of theplanet’s habitable space and contain some 250,000
known species so conserving marine biodiversity
is vital to maintaining a healthy planet.76 In 2020,
it was estimated that around 40 million jobs will
be related to the oceans by 2030.77 Blue economy
governance should involve multiple stakeholders
including governments, industry, civil society, andlocal communities, with science-based decisionmaking to allow it to flourish and be transparent.78
Blue economy technologies, such as thosedescribed below, are solutions that can be used
to promote the sustainable use of water-bodies
resources while driving economic development,
especially in ocean-based activities.
1. Offshore wind energy: Suchfarms have been developed in many
parts of the world to harness thepower of the wind and generateclean energy. Offshore wind facilities
are eligible for Climate Bonds Certification under
the Marine Renewable Energy Criteria.79
2. Aquaculture technologies:
Advances in aquaculture
technology allow the developmentof sustainable fish and farming
practices, thus reducing thepressure on wild fisheries. Some examples ofthese technologies are recirculating aquaculture
systems (RAS), integrated multi-trophic
aquaculture (IMTA), and cage farming.80
3. Coastal management
technologies: Technologies suchas coastal mapping and remotesensing are being used to improve
coastal management and decisionmaking. These tools can provide detailed
information on coastal ecosystems, shorelinechanges, and oceanographic conditions to
support effective planning and management.
4. Sustainable fishingtechnologies: Sustainable fishingtechnologies such as fish aggregating
devices, selective fishing gear, andreal-time monitoring systems arebeing developed and implemented to reduce
bycatch and promote responsible fishing practices.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

24

The GSS+ debt market can attract capital tosupport the development and proliferation ofthese technologies such as remote sensing,molecular technologies, bio-acoustics, etc.
There has been growing interest in blue bondsin Latin America to support sustainable ocean
development and conservation efforts. The IDB
has contributed to the development of blue
bonds: in 2021 IDB Invest issued the first blue
bond in the region and in July 2023 partneredwith Banco Bolivariano for the issuance of ablue bond with incentives linked to meeting
objectives, the first of its kind in the world.81
Ecuador with support from the IDB and the US
Development Finance Corporation, completed
a debt conversion that will allow the country
to allocate resources for long-term marine
conservation in the Galápagos Islands topromote greater sustainability, and Barbados has
also issued blue bonds (see box).82
Belize has also taken positive action towards
ocean conservation by becoming the first
country in the Americas to convert its debt forenvironmental purposes, specifically focusing
on ocean conservation. By restructuring around
30% of its external commercial debt, amounting
to approximately USD550m, Belize aims to
reduce its national debt by 12%. This represents
a substantial investment in marine protection, as
the country will allocate around USD4m annually
until 2041 towards marine conservation andexpand its marine protection parks, including
coral reefs, mangroves, and sea grass beds
through this debt-for-nature swap.83,84

CASE STUDY Barbados debt-for-nature conversion
In 2022, the Barbados
Government, together
with the IDB, The Nature
Conservancy (TNC), andCredit Suisse completed a
debt-for-nature conversion
that allowed the country to reduce borrowing
costs and use savings to finance a long-term
marine conservation programme. This operation
comprised of a USD100m guarantee from the
IDB and another USD50m guarantee from TNC
that enhanced a loan provided to Barbados(Blue Loan) to buyback existing debt. The
savings generated by the operation, currently
estimated in USD50m, will be used to fund aconservation fund to achieve conservationcommitments, which include the protection of
up to 30% of Barbados marine space; and thedevelopment of a blue economy.86
The Blue Loan, which consisted of a
USD146.5m dual currency term loan facility,

Adaptation and resilience
As global warming
accelerates, climate risks
are increasing. According to
the Intergovernmental Panelon Climate Change (IPCC), evenunder low-emission scenarios,
the world will face severe climate risks before
the end of this century, which calls attention

CASE STUDY Ecuador debt-for-nature conversion
In May 2023, the Governmentof Ecuador, the IDB and the
US Development FinanceCorporation (DFC) completed
a USD1.65bn debt-for-nature
conversion that will help
expand the conservation of the Galapagos
Islands’ natural capital and the managementof its marine reserves. It will also promote thedevelopment of sustainable fisheries, and asustainable blue economy for local communities.
The debt conversion consisted of a market
operation through which the Ecuadoriangovernment repurchased, at an average discountof 60%, USD1.65bn of outstanding of sovereigndebt, which was financed by a USD656m loan
granted to the country by a Special Purpose
Vehicle (SPV). This loan was enhanced by an
IDB guarantee of USD85m and political-risk
insurance from the DFC for USD656m. In turn, theSPV financed the loan through the issuance ofa marine conservation-linked bond (Galapagos
Marine Bond) for USD656m with maturity in
2041. The issuance was arranged and structured
by Credit Suisse and 11 private-sector insurers

provided over 50% in reinsurance to give
Ecuador’s ambitions even more credibility. This
type of operation allows countries to improve theirdebt management, while boosting investment
in environmental sustainability and biodiversity
protection. As a result of this, Moody’s InvestorsService rated Ecuador’s new bond investmentgrade, 16 notches above its sovereign issuer rating.
This transaction allowed the country to generate
financial savings of approximately USD1.45bn,
of which USD323m will be transferred over thecourse of 18.5 years to finance the conservation
activities of the Galapagos Life Fund (GLF), a
public-private conservation fund established forthis operation.89,90
IDB Invest is also currently working
with Banco Bolivariano in Ecuador on a
blue bond, the UoP of which will promoteand further extend financing projects andopportunities for sustainable, water‑related
ocean businesses that address the challengesof the blue economy, create sustainablebusiness opportunities in the oceans andmanage oceans responsibly.

was used to repurchase specific Barbados
debt. USD73.25m of the Blue Loan was
financed through the issuance of two Blue
Bonds arranged by Credit Suisse, and theremaining USD73.25m of the loan was funded
by CIBC First Caribbean in Barbadian dollars.87
This was the third time TNC have partneredwith a country on a debt-for-nature
conversion, having previously collaborated
with Seychelles and Belize. The operation
features the first financial instrument to beguaranteed by both a multilateral institution
and a non-governmental organization, andalso features the first sustainability-linked debt
framework focused on nature conservation
developed by the IDB and Barbados as part ofthis transaction.88 The Barbados transaction
demonstrates how the GSS+ debt market
can attract capital to support sustainable
development, environmental management,
and national development priorities.

to the urgency of ambitious and accelerated
adaptation efforts.91,92 Adaptation financing isparticularly important in LAC countries, as theregion includes 9 of the world’s 20 countries most
exposed to climate change related hazards.93 The
region already faces natural disasters, prolonged
droughts, and heatwaves.94
Transitioning to a resilient economy andecosystems requires significant capital
mobilisation but current global financial
flows for adaptation fall short, particularly
in developing countries.95 The adaptation
finance gap in these countries is probably fiveto ten times greater than current international
adaptation finance flows and continues towiden.96 In the LAC region, an additional annual
increase of up to USD18.1bn is required toaddress and prevent ongoing losses.97
Investing in adaptation and resilience (A&R) today
can yield up to four times greater economic
benefits in the future, preventing the need for larger
investments and recovery costs from climate change
impacts.98 GSS+ bonds offer a way to channel
investments towards A&R projects, strengthening thecapacity of systems to cope with climate shocks.
Resilience is already being financed in thesustainable debt market through a variety ofthematic labels. However, financial instruments
clearly designed and labelled to support resilient
investments remain scarce. A major barrier is theabsence of a pipeline of investable projects, mainly
due to a lack of clear, evidence-based definitionsof what constitutes a resilience investment.
Clear definitions and rulesets can broaden thecurrent range of investments that are eligible
for inclusion in the UoP of green and other

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative25

thematic labelled bonds, which can be expanded
to include those that build resilience. This
expansion will include not only investments that
reduce the direct physical impacts of climatechange (e.g., flood barriers, early warning
systems, etc.) but also investments that address
the underlying vulnerability of people andecosystems to climate change (e.g., healthcare,housing, gender equity, deforestation, etc.).

investors, market regulators, observers, andpolicymakers to identify and/or develop
projects, assets, activities, and entities thatmake significant, consistent, and verifiable
contributions towards climate resilience. The IDB
is collaborating with the taxonomy development
by funding research and engagement activities
that ensure the usability and applicability of the
Climate Resilience Taxonomy for LAC countries.

In order to provide these definitions, guidelines
for A&R have emerged. Climate Bonds publishedthe Adaptation and Resilience Principles, toprovide a framework for Climate Resilience Criteriathat require issuers to assess climate risks anddemonstrate that they have addressed those risks
by taking measures to reduce them and adopt
flexible management plans.99 These definitions
have supported the growth of A&R projects in GSS+
instruments globally, providing guidance to monitor
and report risk assessment and management.

The broad applicability in the region will enable
the Taxonomy to be used for mobilising financefor additional climate resilience costs in projects
and assets, or enabling activities.

Mapping the adaptation and resilience
GSS+ universe• Country shares came from Mexico (26%),
Supranational (24%), Chile (16%), Brazil (14%),
Colombia (8%), Argentina (7%), and Ecuador(1%). Guatemala, Panama, Peru, and Uruguay
represent 0,7% of this market each.
- A&R UoP have been increasingly added
to sovereign GSS+ deals. In 2021, 57% of
the LAC sovereign GSS+ deals included
resilience-related UoP. By the end of 2022,
this had increased to 83% with allocations
from Chile, Mexico, and Colombia.
• Regional numbers confirm the global tendency:- There is a hidden market for resilienceliabilities which are currently being funded bybonds bearing one of the existing GSS+ labels.

The description of eligibility categories for
the UoP is based on information made publicthrough a bond’s framework, final terms, orprospectus. The total capital flows towards
climate being directed to A&R investments
through GSS+ bond instruments are estimates.
Disclosure and tagging practices must evolve toaccurately capture and track A&R-related finance.

To continue driving market ambition andfacilitate the rapid mobilisation of global
capital for investments in resilience of physical,
social, ecological, and financial systems,
Climate Bonds is launching a Global Climate
Resilience Programme. This aims to support:(i) the identification of credible, science-based
investment opportunities that build resilience(including the development of a Climate
Resilience Taxonomy), (ii) mobilisation offinance towards credible resilience measures,and (iii) acceleration of growth of resilience
investments through a supportive policy andregulatory environment.

LAC Adaptation and Resiliencemarket highlights• Of the 654 GSS+ deals identified in LAC by
the end of 2022, 147 (22%) of them presented
resilience-related UoP. This is above the global
average (19%).
• Development banks were the largest source of
resilience-related UoP originating from LAC (46deals), followed by sovereigns (32 deals) andnon-financial corporates (31 deals). There arealso 24 deals from financial corporates, 11 fromgovernment-backed entities, two from local

At the start of 2023, Climate Bonds started
the development of the Climate Resilience
Taxonomy, a common framework for issuers,

GSS+ bonds for climate resilience in LAC scorecard
Greengovernments and one from a not-for-profit.

SocialSustainability

SLB

Transition

Number of
instruments

30

48

69

N.A.

N.A.

Number ofissuers

19

22

21

N.A.

N.A.

Number ofcountries

4

9

4

N.A.

N.A.

Number ofcurrencies

6

12

14

N.A.

- However, overall, the UoP allocated to A&R
measures still needs to grow. This confirmsthat the current market is tilted towards lowcarbon solutions as opposed to measures toaddress A&R. This is unsurprising given the
low profile of such projects, and a dedicatedtaxonomy will allow borrowers to identify andprioritise appropriate assets and projects.
When compared with the global and regionalbonds market rebound, numbers between
2021 and 2022 show relative stability of A&R
components in the market, demonstrating thegrowing importance of resilience investments in
LAC. Naturally, these issuances are concentrated
in more mature markets, such as Brazil, Mexico,
Colombia, Chile, and Argentina, which areleading the way in addressing climate andsocial risks. New frameworks, definitions andguidelines on resilience will be key to increasing
and channelling more resources towards thissystemically important class of assets.

Examples of GSS+ issuances withresilience related UoP are:
• The five sustainability bonds issued by the
Mexican Government with JPY75.6m cumulative(USD 543.4m), which have UoP earmarked for:- early warning systems for monitoring andforecasting water-related hazards,- water-related hazard emergency plans andprocedures,

N.A.

- the construction, operation, and maintenanceof public sanitation infrastructure,

GSS+ Bonds for climate resilience in LAC scorecard
between 2021 and 2022
2021

2022

- public hydraulic infrastructure, and,- rehabilitation and conservation of dams andprojects from renewable energy sources.

Percent change YoY

Number of instruments

48

49

+2%

Number of issuers

26

18

-31%

Number of countries

6

5

-17%

Number of currencies

9

10

+11%

• The USD1.2m green bond issued by Interchile
S.A. in 2021 has UoP designated for upgrading,
improving, and retrofitting of transmission
infrastructure and substations, aiming toenhance the resilience of the system toweather-related events.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

26

Country overviews and deep dives
Chile
Over the last decade, Chile
has been among the fastest
growing economies in Latin
America and has rapidly
recovered from the COVID-19 pandemic throughmeasures such as fiscal support, consumption
incentives, pension fund withdrawals, and highvaccination rates.100 However, similar to manyother countries in 2022, Chile encountered highinflation (12.8%) and increased unemployment(7.9%) due to global geopolitics. As of
December 2022, Chile’s foreign currency debt
was rated A- by Fitch Ratings indicating a solid
macroeconomic environment, declining public
debt, with opportunities for economic growth
and an increase in the GDP per capita.101

in 2019. Chile is a global leader in the mining
industry, particularly in copper production and its
abundant reserves play a pivotal role in meeting
global demand for this essential component of
renewable energy and low-carbon vehicles. Chile
has investments in infrastructure, technology,
and human capital for efficient and sustainable
mineral supply.

Sustainable finance market
Chile is the largest country source of thematicbonds in the Latin American region (USD43.2bn)
dominated by multiple sovereign deals
contributing 80% of volume. By mid-2023, Chile
was the only country to have issued sovereign
bonds under four of the five thematic labels.

Green

Chile aims to achieve GHG emission neutrality
and resilience by 2050 through its Climate
Change Framework Law.102 The long-term
strategy (ECLP) focuses on technologicaldevelopment, knowledge transfer, climate
performance indicators, capacity building, andthe development of climate finance.103 In 2020,
Chile updated its NDCs based on eight criteria:
synergies with the SDG, just transition, watersafety, gender equality, cost efficiency, NbS,
knowledge types, and active participation.
This ambition is present in all Chile’s sovereign
thematic debt frameworks.104

The green bond market isdominated by sovereigns with
USD7.4bn representing 58%.
Non-financial corporates follow with a larger
number of smaller deals, contributing volume of
USD3.8bn with 29%. Hard currencies prevail with
61% of the volume in USD (USD26.6bn) and 20%
in EUR (USD8.8bn). The only green bond in local
currency (CLF) was from non-financial corporate
Sonda. Most (92%) green bonds have obtained
an SPO, with the main source being Moody’s ESG
Solutions, followed by Sustainalytics, S&P Global,
and ISS-ESG.

In 2018, Chile launched the Energy Route2018–2022 to modernise energy regulation,
promote renewable technologies, improvetransport efficiency, and enhance quality oflife.105 Over the last decade, Chile’s solar and wind
power capacity has grown from 0.6% to 21.4%
and renewable energy generation reached 44%

Transport (60%), Energy (26%), Low Carbon
Buildings (6%), and Adaptation (4%) are thelargest UoP categories. Most of the UoP (64%)
from non-financial corporate deals is earmarked
for Renewable Energy. Industry, ICT, and Waste
are almost non-existent at present.

CASE STUDY Chile priced the first sovereign SLB.
The Chilean Ministry of Financereferenced the World Bank’s
suggested KPIs in its March 2022
SLB framework complying with
ICMA’s SLB Principles.
Later that month, Chile priced the firstsovereign SLB. The USD2bn 2042 maturity deal
included coupon step-ups of up to 25bps intotal, based on specific targets:
1. Failure to achieve annual GHG emissions of
95 MtCO2e by 2030, and a maximum of 1,100
MtCO2e between 2020 and 2030 would incur a
coupon step-up of 12.5bps.
2. Failure to achieve 50% electricity generated
from non-conventional renewable sources by
2028, and 60% by 2032 would incur a coupon
step-up of 12.5bps.

Chile’s Scorecard

The deal achieved an order book 5.75 times
the deal size, and primary market spreadcompression was reported as 40bps. Climate
Bonds observed a normal new issue premium.
Investors describing themselves as green orsocially responsible were allocated 68% of
the deal, and the order book included a broad
range of international accounts, diversifying
the investor base.
SLBs represent opportunities and challenges
for sovereign issuers. The structure offers aneffective mechanism to link borrowing costs
to the country’s sustainability progress but
requires robust strategic sustainability plansthat can set clear and measurable targets forthe proposed KPI’s.

Total Amount
(USD)

LAC
RankingGreen

12.7bn2ndSocial19.3bn

1st

Sustainability

8.5bn

2nd

SLB

2.5bn

3rd

The UoP from the Chilean sovereign bonds isearmarked for low-carbon transport projects
including electric bus fleets and metro lines inSantiago de Chile and its metropolitan area.106
54% of the deals fall into the 10-20-year range
while 3% extend beyond 20-years. This longer
time horizon is influenced by the infrastructure
UoP of the sovereign deals.

SocialBanco del Estado de Chile kickstarted the country’s social bondmarket in 2016 with two deals:
USD149.6m and USD95.9m. In 2021,
the market volume reached USD12.4bn, primarily
driven by the sovereign. In 2022, only two social
bonds were issued, totalling USD121m, by Cajade Compensación de Asignación Familiar de Los
Andes. The Chilean Government is the largest
player with USD18.5bn, followed by Banco delEstado de Chile (USD423.6m), Banco Santander
de Chile (USD150m), and compensation funds
Asignación Familiar de Los Heroes (USD143.3m)
and Asignación Familiar de los Andes (USD77.8m).
Most social bonds are in hard currency, offering
investor protection against currency risk, andhave a tenor of 10-years or less. 99.7% of thesocial deals have obtained an SPO from either
Moody´s ESG Solutions or Sustainalytics.
Affordable Infrastructure (15%), Equality(15%), and Employment & Training (14.5%)
were the largest UoP categories. The UoPof the sovereign deals was earmarked for thesocial priorities established in the Sustainable
Bond Framework, including support tovulnerable groups, access to pension, healthcare,and education.107

Sustainability
Chile´s sustainability bond market
is the second largest in LAC, andAguas Andinas priced the first deal
(USD66.8m) in 2018. The government is the largest
issuer with USD11.6bn cumulative including
USD5bn priced in 2022, followed by non-financial
corporates Celulosa Arauco y Constitución(USD1bn cumulative) and Empresa Nacional de
Telecomunicaciones S.A. (USD800m).

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative27

Smaller non-financial corporate issuers include
Aguas Andinas (USD149.4m cumulative), Esval
S.A. (USD61m) and Hortifrut (USD44.4m) withsocial UoP categories named as Affordable
Housing, Infrastructure, and Equality as wellas Buildings, Water, and Waste for green UoP.
These deals demonstrate how the thematic
debt market can support the diverse financing
needs of entities which either may not haveenough qualifying assets to price a deal under
the green or social labels or wish to prioritise ajust transition.
Most sustainability deals from Chile were issued in
USD (86%), followed by CLP (12%) and CLF (2%).
Over 81% of the cumulative volume have tenors
of more than 10-years with 37% falling in the 20+
year bucket and 45% in the 10-20-year bucket.
All sustainability deals obtained an SPO either by
Moody´s ESG Solutions or Sustainalytics.
The largest green UoP categories in thesustainability market are Industry, Waste, andBuildings, each accounting for 14%, while
Affordable Infrastructure (24%), Education (14%)
and Employment and Training (14%) dominate
the social categories. None of the sustainability
deals name adaptation among the UoP and only
sovereign deals earmark UoP for Healthcare,
Microfinance, Food Security and Social A&R.
Non-financial corporate issuers focus on
Employment and Training, Education, Affordable
Infrastructure, and Equality for social UoP.
Chile’s SLB market ranks third largest in LAC
following Brazil and Mexico, with two SLBs.
In 2021, Inversiones CMPC S.A. issued a USD500m
10-year deal. The SLB included two main KPIs:
GHG emissions reduction and intensity ofindustrial water use. The SPT for GHG emissions
on scope 1 and 2 is a 23.5% reduction by 2025,
while the SPT for water intensity is 25% by 2025.
This deal aligned to ICMA’s SLB Principles andobtained an SPO from DVN GL.108 In 2022 the firstsovereign SLB was priced by Chile.

MexicoMexico, the second largest
economy in Latin America
faces a complex socioeconomic situation with highinequality and poverty. The COVID-19 pandemic
exacerbated economic challenges, resulting inbusiness closures and increased unemployment
rates. As of 2020, around 43.9% of the population
lived in poverty.109 In addition to economic issues,
Mexico grapples with social and political setbacks
such as corruption and violence, hindering its
overall development. However, Mexico hastaken steps towards improving education andhealthcare, implementing inclusive growthpolicies and reducing inequality, which could
be supported through a sovereign social bond.
Climate change costs in Mexico, excluding
extreme weather events and biodiversity loss, areprojected to range from 6.2% to 30% of GDP by
2100. In contrast, the costs for mitigation efforts
are predicted to be lower, ranging from 0.7% to2.2% of GDP.110
Trade between Mexico and the US reached arecord high in 2022 totalling US779.3bn, with
American investment in Mexico at 42.56% of
the total FDI, fostering regional integration andgrowth.111 Mexico and Central America haveenormous potential as the US seeks to bring
manufacturing closer to its shores reducing
transportation costs, emissions, and politicalrisks.112 Smart factories, sustainable infrastructure,
low-carbon buildings, and transport can befinanced through green bonds. These sectors
already have well-defined transition pathways
providing an opportunity for companies
to implement environmental complianceprogrammes and adopt sustainable practices.113
However, the challenge lies in the simultaneoustransition to clean energy and nearshoring, which
poses a challenge, especially in northern areasthat face water and energy scarcity.114
Mexico has ambitious climate change goals,
including generating 35% of its power fromclean technologies by 2024 and reducing
emissions by 30% by 2030, with a further targetof 50% reduction by 2050, compared to 2000
levels.115 The sustainable debt market canfinance emission reduction projects. At COP27,
Mexico submitted an updated NDC with an
unconditional emissions reduction target of up
to 35% by 2030 for all GHGs.116 The NDC specifies
that 30% of the reduction is to be achieved
with its own resources, and 5% through agreed
international cooperation. Furthermore, it set
a conditional target to reduce emissions by up
to 40% in 2030, with international support. The
thematic debt market can attract finance tosupport these objectives.
Mexico has taken various steps to promotesustainability in the banking sector. The
Sustainability Committee of the banking

Mexico’s Scorecard
Total Amount
(USD)

LAC
Ranking

Green

3.2bn

3rd

Social3.04bn

2nd

Sustainability

17.8bn

1st

SLB

8.1bn

2nd

association (ABM), active since 2007, createdthe voluntary Sustainability Protocol, which has
been signed by 31 commercial banks and sevendevelopment banks.117 In March 2022, bankswith a total credit portfolio exceeding MXN6.4tn
signed a declaration which commits them tofoster a greener financial system, strengthen
ESG strategies, and collaborate with regulatorsand stakeholders. The banks will track progress
towards climate finance goals and align with
the national climate finance agenda to promotesustainability in the banking sector.
Mexico has abundant lithium reserves that can
support battery production, but sustainable
mining practices are crucial to minimise
environmental impact. The country also has
vast desert areas ideal for solar and wind farms.
To fully leverage this potential, policy support
is needed to incentivise financing aligned withsustainability criteria and the taxonomy. By
promoting sustainable mining and renewableenergy, Mexico can lead the transition to agreener economy and capitalise on the demand
for lithium and renewable energy sources.

Sustainable finance market
Since its inception in 2015, Mexico’s sustainablebond market has experienced growth of 11%
YOY from 2021 to 2022. This can be attributed to
Mexico’s steadfast commitment to sustainable
development and the willingness to addresssocial and environmental concerns for long-term
economic growth and stability.

Green
Green bonds represent 10% of
Mexico’s GSS+ market but there
were no new deals in 2022, as otherthematic labels were prioritised.
The largest contribution to the label has beenfrom non-financial corporates (35%) with
USD1.1bn, followed by financial corporates
and development banks with 31% and 30%
respectively. External review is at 96%, of which
SPOs constitute 62%, Certifications 20%, andratings 14%. Sustainalytics was the preferredexternal reviewer for both SPOs and Certifications
while S&P provided most ratings, followed by HR
Ratings. 73% of deals were issued in USD and
27% in MXN with smaller ticket sizes.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative28

Renewable Energy is the largest UoP of green
bonds originating from Mexico (55%). This isfollowed by Low Carbon Buildings (19%) a
growing sector; the country even has its local
green proxy for residential buildings (EcoCasacertified). Land Use UoP is mostly earmarked forprotected agriculture and irrigation systems. Oneof the main issuers in this category is FIRA, thecountry´s agricultural development bank, whosebonds, such as their recently issued MXN2.8bn(USD154.9m) resilience bond (the first in LAC),
have led the market. UoP for waste has comefrom Grupo Aeroportuario del Pacífico and Coca
Cola FEMSA which named pollution prevention
and control among their UoP.

SocialSocial bonds originating from
Mexico represent the smallest
share (9%) but in 2022, USD2.19bn
was priced, representing YOY growth of 359%.
All deals had external reviews and weremainly issued in MXN, except one EUR750m(USD832m) deal from Banco Sabadell. Affordable
infrastructure received the highest share of UoP,
followed by equality. The diversified range ofsocial expenditures is related to the issuer types.
Non-financial corporates priced most of thesocial volume (37%), followed by developmentbanks (25%) with USD1bn including NAFIN (43%)
and FIRA (57%). Coca-Cola FEMSA was the only
non-financial corporate, contributing 9%.

Sustainability
Mexico´s sustainability theme
dominates the GSS+ market with
55% and is the largest in the region
reaching its peak of USD9.6bn in
2022 to total USD17.8bn. All deals have SPOs,
mostly from Sustainalytics and Moody´s ESG
Solutions, signifying disclosure importance. Local
currency dominates with 57%, followed by USD
with 25% and EUR with 15%.

CASE STUDY State of Mexico local government
Sub-sovereign municipalities
are following national trends;
the local municipality of theState of Mexico, located in thecentre of the country, issued a15 year, MXN2.8bn (USD142m) sustainability
bond in 2022.118 It obtained an SPO from
Sustainalytics. The placement attracted 10participants who placed 22 bids amounting
to 1.25 times the deal size.
The financing projects are aligned with theDevelopment Plan of the State of Mexico

2017-2023 and the Sustainable Development
Goals of the UN Agenda 2030. The funds willbe allocated to 18 projects, including twoemblematic “Ciudad Mujer” projects (safespaces for women) and low-carbon public
transport powered by electricity and solar
energy. This placement demonstrates investor
confidence in the stability and strength of theState of Mexico’s public finances, endorsedby its possession of the second-highest credit
rating in the country.119

By December 2022, USD7.7bn of Mexican
sovereign sustainability bonds had been
issued spread over four currencies (MXN, USD,
EUR, and JPY). Most the deals had tenors of
between 5 to 20 years, supporting the financing
of long-term infrastructure projects anddevelopment initiatives. Such instruments are
ideal for real money investors with long-term
liabilities including pension funds and insurancecompanies. UOP is distributed between all green
and social UoP categories, aligned with the SDGs,
and supports the 2030 agenda objectives with
Affordable infrastructure and Energy leading with
26% and 17% respectively.

Sustainability-linked bonds
Mexico is the second largest sourceof SLBs in the region. Deals in 2022
amounted to USD2.05bn, reaching
USD8.1bn in the local market. All deals obtained
an SPO and had tenors below 10 years except
for the 2021 USD606m Fomento Economico
Mexicano SLB and the Braskem 2021 USD1.2bn
SLB. 49% of Mexican SLBs were priced in USD,
and 25% in EUR, with the remaining 26% priced
in Mexican pesos.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative29

Brazil
Similar to many othercountries, in 2022, Brazil
faced rising energy and foodprices, and subsequent highinflation due to global geopolitics. By April,
the IPCA (Consumer Price Index) reached12.13%, the highest in 20 years.120 To combat
inflation, restrictive monetary and fiscal policies
were implemented, including high interest
rates. Brazil’s policy rate, the Selic, reached13.75%, the highest since 2016 and the second
highest in world.121 While Brazil’s GDP initiallyshowed strong growth in 2022 as the economy
rebounded from the impact of the COVID-19
pandemic, the growth rate gradually declined
ending the year below expectations at 2.9%.122
Brazil’s climate goals are outlined in its National
Policy on Climate Change (PNMC).123 This policy
aims to mitigate GHG emissions and promote
adaptation initiatives. Brazil has set a target to
reduce its projected GHG emissions for 2020 to
between 36.1% and 38.9% through sector-specificmitigation plans.124 Brazil first published its NDC
after COP21, in 2016. In its most recent updatefrom 2020, the country set more ambitious goals,
committing to reduce GHG emissions by 37% in
2025 and 43% in 2030 from a 2005 baseline.125
Brazil boasts rich natural resources and is particularly
renowned for its biodiversity. The country’s crownjewel, the Amazon rainforest, holds immense
ecological diversity, serving as a critical habitatfor countless species and playing a vital role inmaintaining global climate balance. The country’s
extensive network of rivers, contributes to thepreservation of freshwater ecosystems and supports
a diverse range of plant and animal life. Additionally,
Brazil’s efforts to protect its water sources are crucial
for ensuring clean drinking water supplies for its
population and maintaining ecological balance.

Sustainable financial market
By the end of 2022, Brazil was the third largest
sustainable debt market in LAC. Adding USD7.2bn in
2022, it reached a volume of USD31.9bn and it is the
only country in LAC to include all five thematic labels:
green, social, sustainable, SLB, and transition.
Brazil is yet to price a GSS+ sovereign deal.

Green
Brazil continues to dominate thegreen bond market in LAC with thelargest number of issuers. The green
theme represents 48% of Brazil GSS+ debt, led by
non-financial corporate (79%), financial corporates(11%), and development banks (8%). Most green
deals have maturities of 5-10 years (48%), withshorter deals making up 26%, and 15% are longer
than 20 years. 59% are denominated in USD and
37% in BRL. Food manufacturer BRF SA issued theonly EUR deal. Nearly all deals (96%) obtained an
external review, primarily SPOs (87%), or Climate
Bonds Certification (9%).

Renewable Energy (56%), Land Use (20%) andTransport (10%) dominate the UoP categories.
Recent bonds were allocated to various UoP
categories: BRK Ambiental (USD366m) for Water
Supply Services, EcoAgro (USD92m) for Sustainable
Forestry and Biodiversity Management, RDVE
Subholding SA (USD91.5m) for Renewable Energy(wind farms), FS Luxembourg Sarl USD80m for
Bioenergy, and Tegra Incorporadora SA (USD51.7m)
for Low Carbon Buildings. Two ABS deals fromFS Bioenergia, each worth USD74.4m, earmarked
UoP for Biomass Production.

SocialSocial bonds remain a small
component (2%) of GSS+ deals
in Brazil, totalling USD699m. The
largest deal, priced in late 2022 by Banco do
Brasil, was a USD500m, 2029 deal. UoP wereallocated to Healthcare, Employment Generation,
Microfinance, Affordable Infrastructure, andSocioeconomic Advancement and Empowerment.
Financial institutions accounted for 91% of the deals,
except for two Real Estate Receivables Certificate(CRI) ABS deals. All deals obtained an SPO and
81% of social bonds had a 5–10-year maturity.

Brazil’s Scorecard
Total Amount
(USD)

LAC
RankingGreen

15.2bn1stSocial699m

4th

Sustainability

3.2bn

4th

SLB

11.9bn

1stTransition

670.4m

1st & only

Sustainalytics providing the majority (70%),
followed by NINT and Bureau Veritas. USD wasthe dominant currency for Brazilian sustainability
deals (61%), followed by BRL (39%).
The most frequently mentioned social UoP
categories for sustainable bonds include
Affordable Infrastructure (34%), Social Adaptation& Resilience (22%), Equality (11%) and
Employment & Training (11%). The dominant
green UoP is Energy (26%), followed by ICT (16%),
Water (13%) and Buildings (12%).

Most social deals from Brazil are denominated in
BRL (11), representing 28% of the total volume.
The majority, accounting for 72% of the volume,come from a USD bond issued by Banco do
Brasil. The USD500m bond follows a countrywide UoP distribution, with 21% allocated to
Microfinance and Employment and Training, and
19% for Healthcare.

In November 2021, Rio Smart Lighting Sarl issued
Brazil’s largest sustainability bond, for USD952m.
The UoP was earmarked for Renewable Energy andICT on the green side, and Affordable Infrastructureon the social side. In 2022, Banco Bradesco S/Apriced a USD500m bond earmarked for Renewable
Energy, Low Carbon Buildings, Water andSanitation, Waste Management, Land Management,
Food Security, and Affordable Infrastructure.

Sustainability

Sustainability-linked bonds

By the end of 2022, sustainability
bonds comprised 10% of theBrazilian GSS+ volume, or
USD3.2bn. Deals priced in 2022 amounted to
USD1.3bn. Non-financial corporates accounted
for 60% of the deals, followed by financial entities(35%) and government-backed entities (3%).
Nearly all (98%) of the bonds had SPOs, with

Brazil’s second largest thematic
debt category is SLBs, and Brazil’s
presence in the market is the largest
in LAC with volume reaching USD11.9bn by theend of 2022. Non-financial corporate issuers
dominate the market, accounting for 94% of
the total, followed by financial corporates. All
Brazilian SLBs have obtained SPOs, mostly fromCASE STUDY Globo Comunicação e Participações S.A.:
First LAC SLBs with absolute scope 1, 2 and 3 KPIs
Globo Comunicação e Participações S.A.is thelargest mass media communication group in
Brazil. The group operates a large broadcast
television network, paid TV programming,
publishing, internet content and music label
companies. In April 2022 Globo priced its first
SLB for USD400m with coupon rates linked tothe achievement of absolute scope 1, 2 and 3
GHG emissions (tCO2e) reduction.127
Sustainalytics reviewed Globo’s Sustainability
Framework and defined the calibration of
their SPTs. Globo has set six goals to achieve
the SPTs: deployment of uninterruptible
power supply (UPS) for live entertainment,

deployment of biodiesel-powered generators,
recycling refrigerant gas, wider deployment ofphotovoltaic power (PV) generation systems,
use of technology for reducing business travel,
and a zero-landfill goal.128
Through its SLB, Globo aims to demonstrate
its commitment to its emissions goals, bytying the interest rate to reducing absolute
scope 1, 2 and 3 GHG emissions to 15% by
2026, against a 2019 baseline. The innovative
approach to scope 3 emissions reduction as a
KPI is ground-breaking in its efforts to address
climate impacts along the supply chain.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative30

ISS ESG, NINT, and Sustainalytics. The dominantcurrency is USD with 75% of the volume, while
the rest was BRL. In late 2021, the Brazilian Stock
Exchange, B3 SA Brasil Bolsa Balcão, issued a
USD700m bond to finance its corporate social
responsibility (CSR) activities, with an SPO from
Sustainalytics. Aegea Finance Sarl also issued a
USD500m bond with two KPIs focusing on energy
efficiency for water facilities and general CSR andenvironmental actions.
GHG emissions were the target for half of the KPIs
in Brazilian SLBs, while CSR was chosen for 16%,
circular economy 7.7%, and renewable Energy 4.3%.

Transition
Two transition deals from different
issuers represent 2.1% of thethematic debt market originatingfrom Brazil. Mayfrig priced a
USD500m deal in 2019, and Eneva priced atwo-tranche BRL bond in 2020, for BRL948m(USD170m). Both deals obtained an SPO.
Transition finance from companies in carbonintensive sectors, such as the agro-industry orenergy generation, is driving the market towards
structured measures to align with the 1.5° future.
Eneva, a company that operates generation,
exploration and production of oil and natural
gas and sale of electricity is using transition
bonds to support projects that enhance energy
efficiency and reduce emissions. For Marfrig,
financing its cattle sourcing operation fromdeforestation-free suppliers also indicates to themarket that the company is raising expectationsin its supply chain, and addressing transition. In
both cases, transition bonds were deployed toraise finance for projects which limit the material
negative impacts on the environment. Additional
information on transition bonds can be found in
the Climate Bonds Initiative Financing Credible
Transition paper.126

CASE STUDY Arcos Dorados BV: first SLB issuancefrom a LAC restaurant chain
Arcos Dorados Holdings is Latin America’s
largest restaurant chain and the world’s largest
independent McDonald’s franchisee. In April
2022, Arcos priced its first SLB, with the goalof reducing GHG emissions throughout its
operations. The USD350m deal had a coupon
step-up linked to a single KPI, the reduction ofscope 1, 2 and 3 GHG emissions.

2025, both using 2021 as the baseline.129 The
inclusion of scope 3 emissions is a rare, butwelcome development. Upstream scope 3
emissions, in the form of the carbon footprint
in its supply chain accounts for more than
93% of Arcos Dorados total GHG emissions, so
the SLB framework addresses almost 100% of
their total emissions footprint.130

The SPTs specified a commitment to reduce
15% of GHG emissions from its restaurants
and offices and 10% from its supply chain by

Sustainalytics reviewed the deal, and theframework was confirmed to align with ICMA’s
Sustainability-Linked Bond Principles (SLBP).

Uruguay
In 2022, the Uruguayan
economy rebounded with agrowth rate of 4.4% driven
by increased exports andinvestments in infrastructure projects.131
However, inflation reached 9.5% leading to a risein borrowing costs and a decline in household
consumption. Uruguay’s GDP deficit of nearly
2% improved due to increased income from theeconomic recovery and controlled expenses
supported by government assets and credit lines
from multilateral organisations.132 The Ministryof Economy and Finance projects a 2.6% fiscal
deficit of GDP for 2023, with central government
financing needs estimated at USD4.094m.133
Industries including agro-exporters, infrastructure
construction, and manufacturing benefited froman increase in external demand. While Uruguay’s

Uruguay’s Scorecard
Total Amount
(USD)

LAC
Ranking

Green

337m

11th

Sustainability

15m

13th

SLB

1.5bn

4th

thematic bond deals are relatively few, there
is potential for climate-focused initiatives toattract local and international investors. GSS+
instruments offer an opportunity to raise debt
at favourable rates while addressing climate
risks and supporting Uruguay’s sustainable
development goals.
Uruguay is one of the world’s most sustainablecountries, with 98% of its energy coming

CASE STUDY Uruguay’s Sovereign SLB
In October 2022, Uruguay issued
its first GSS+ bond, an SLB,with support from the IDB. The
USD1.5bn 2034 maturity deal had
a unique structure incorporating
both step-up penalties and step-down rewards
according to whether the SPTs are exceeded by
2025. This model could incentivise EM climate
progress by reducing debt-servicing costs for
those that hit climate or nature-based goals.
If Uruguay overshoots its GHG emission NDC(-3.2%/year) it would save around USD33.7m inborrowing costs. If both targets were achieved,
the potential saving would be around USD67.1m.
The deal attracted a reconciled order bookof 2.6 times the deal size, from 188 accounts
from the USA, Europe, Asia, Uruguay, and other
LAC countries. Among these were 40 accounts
participating in a Uruguay USD deal for the firsttime, many with a sustainability focus. This
interest enabled spread compression of 25bps,
and the Ministry of Economics and Financereported a greenium. The deal moved further
inside the curve in the secondary market.

KPI Commitments of Uruguay’s SLB

KPI 1.1

MetricSPTSPT deadline

GHG emission
reduction-50%(NDC aligned)

31/12/2025

KPI 1.2
KPI 2.1

Forest conservation

KPI 2.2

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

CouponChange+15bps-52%-15bps100%+15bps103%-15bps31

from renewable sources.134 The Sistema
Nacional de Respuesta al Cambio Climático y
Variabilidad (SNRCC) was established in 2009
to monitor progress towards achieving its
NDCs and other climate polices.135 In 2016, theMinistry of Environment, Water and Climate
Change was formed to coordinate climate
policy.136 The ministry sitting on the Sistema
Nacional Ambiental (SNA) committee works
to increase the visibility of Uruguay’s climate
work internationally. Uruguay’s climate policy
achieved international recognition, when in 2017
it identified 106 methods to reduce emissions
to achieve its NDCs including measures inagriculture and food production, native land
reforestation, and the restoration of pasture andgrasslands as carbon sinks.137 In November 2022,
Uruguay submitted its second NDC, emphasising
unconditional mitigation targets and focusing
on A&R in various sectors such as agriculture,
biodiversity, infrastructure, and water.

Sustainable finance market
To date, Uruguay has had a modest presencein the GSS+ markets with total volume from thecountry reaching USD1.8bn. Most of this camefrom the USD1.5bn sovereign SLB priced in
November 2022.
The local market pioneer, Invenergy placed
two green bonds worth USD135.8m and USD
64.7m, respectively in 2017 and January 2018,
to finance its Campo Palomas wind farm and
La Jacinta solar farm. In 2018, Atlas Renewable
Energy issued a green private placement
totalling USD 108.4m directed towards solar
plant refinancing and the development of aphotovoltaic park. In 2020, the Spanish Solaria
Energia y Medio Ambiente (NATELU) issued USD
24m in green proceeds to refinance solar farms
in Uruguay. In February 2021, BBVA Uruguay
priced the country’s only sustainability bond, a
USD15m deal supported by IDB Invest to financeenergy efficiency, sustainable agriculture, SMEs,
clean transport, sustainable construction, andbusinesses owned by women and young people.
Despite its small size, Uruguay is a major exporterof frozen bovine meat (beef and buffalo),sulphate chemical wood pulp, concentrated milk,
and electricity, mainly to China, Brazil, UnitedStates, Argentina, and the Netherlands.138 The
country also targeted growth in the software
industry by combining high tech hubs, education,and government policies to become one of themain technology exporters in the region. The
GSS+ bond market can absorb borrowing via
thematic debt to support strategies aligned withthe transition pathways of each sector.

Dominican Republic
The Caribbean region faces
economic challenges due tohigh levels of debt, limiting
investment in development
programmes. Four Caribbean countries wereamong the top 25 with the highest debt-to-GDP
ratios in 2015, diverting resources away fromessential needs.139 Despite this, Caribbean
nations are working to address the issue andutilise financial tools for climate action. The
region is highly vulnerable to climate change,
with altered precipitation patterns, increased
storm intensity, and hurricanes. The Dominican
Republic ranks 12th globally for natural disaster
exposure. These conditions impact sectors like
agriculture and tourism, reducing resources andecosystem services while increasing emissions.
Despite being one of the ten largest economies
in Latin America, over 20% of Dominicans
still live in poverty. The Dominican peso is astable currency, ensuring competitivenessand exchange rate stability. The central bankmanages monetary policy to maintain afavourable macroeconomic environment, with
inflation averaging 3.5% from 2010 to 2020.140
However, the country experienced lower growthand inflation compared to the rest of the region
before the COVID-19 pandemic. The Dominican
Republic is highly vulnerable to climate change,
which poses a threat to economic growth anddevelopment. Efforts are being made to addressthese challenges.
The Dominican Republic aims to reduce GHG
emissions by 27% by 2030 under the Paris
Agreement.141 The country has established alegal framework for environmental protection
and sustainable resource use, with the Ministry

Dominican Republic’s Scorecard
Total Amount
(USD)

LAC
Ranking

Green

20m

14th

SLB

300m

Tied in 7thof Environment and Natural Resources
responsible for implementing policies providing
norms and incentives for sustainable production
and consumption.142 Collaboration withinternational organisations helps align national
climate goals with global targets. One of theinitiatives is the development of a green financetaxonomy with international support. To reducecarbon emissions, the country has identified
four priority sectors that contribute to over
70% of emissions, including energy, transport,
forestry, and quick wins in the sectors of waste,cement, and tourism.

Sustainable finance market
The Dominican Republic was the only new LAC
country to join the green bond market in 2022. It
joined the SLB market in 2021.
Although the Dominican Republic has not yet
priced a sovereign bond, such a deal could
serve as a catalyst for market growth in the
Caribbean. The country has announced very
detailed pathways for waste reduction andmanagement, and given that incentives arebeing set to finance these projects, green bonds
could be the ideal vehicle to raise money forthis sector. Transport, Industry, Buildings, andICT have also been identified by the country for
decarbonisation which could also be financed
through thematic debt.

CASE STUDY
Dominican Republic renewable energy bonds
Power generation company
Empresa Generadora deElectricidad Haina (EGE Haina)
priced a green bond to add
to its existing SLB. The UoP of
the USD20m green bond was earmarked forthe expansion of the company’s wind farmcapacity, with the goal of increasing it from176 MW to 296 MW.145 The investment wasmade specifically to the company’s Parque

Solar Girasol, the largest photovoltaic central
in the country and in the Antilles Islands. The
green bond was verified by Pacific Corporate
Sustainability (PCS) to obtain the country´sfirst Climate Bonds Certification.
The company’s USD300m SLB was priced in
2021, obtaining an SPO from Sustainalytics.
The SPTs aim to increase the installed capacityof wind and solar energy projects by 1,000MW.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative32

Other countries
Colombia

Peru

EcuadorColombia´s strong
macroeconomic and fiscal
management has supported
its consistent economic
growth. Combined with
ambitious climate mitigation and adaptation
goals, aiming to reduce GHG emissions by
51% by 2030 and achieve carbon neutrality
and climate-resilient development, it has
supported several initiatives to mobilise
resources for a sustainable economy,
indicating Colombia’s high potential to makestrides in this area.

Peru has made substantial
progress in sustainable finance,
attracting private investment
for infrastructure funding.
Initiatives like ProInversion
have successfully mobilised public-private
partnerships and project pipelines. The country
has tapped into international financial markets,
through foreign direct investments (FDI),
focusing on the energy, transport, and mining
sectors aligned with green investments. Despite
the pandemic’s impact on FDI, Peru expects
opportunities in these sectors to increase. While
the sustainable finance market has grown more
slowly compared to neighbouring countries, Peru
has implemented climate policies and initiatives
to foster market expansion. Peru’s pioneering
efforts in LAC include the region’s first labelledbond in 2014 by Energía Eólica for USD204m anda sovereign sustainable bond in 2021. Amounting
to USD6.5bn, Peru ranks fourth in the LAC GSS+
market. Climate Bonds has explored the Peruvian
sustainable debt market in detail in its 2022 Peru
Sustainable Finance State of the Market report.144

Ecuador’s sustainablefinance market is stillin the early stages ofdevelopment but has
achieved some impact
with deals including Banco Pichincha’s bond,which was the country’s first green bondin December 2019. However, accessing thedebt capital markets poses challenges forthe financial market in Ecuador. Despite this,the country has demonstrated innovation indeveloping new financial products with thesupport of MDBs. Ecuador also achieved a
regional milestone when it priced the firstsovereign social bond in 2020. Social bonds
have great potential to support the local
economy such as the Cooperativa de Ahorroy Crédito (COAC) Chibuleo USD15m bond in
2022 with UoP for Microfinance and Equality
and three other social bonds from financial
corporates which dominate the issuer type in
the country. As Ecuador’s sustainable financemarket evolves, overcoming challenges andexpanding access to financial resources will
be vital for its growth and development.

The Colombian sustainable finance market
ranks sixth in the LAC region with a total
volume of USD2.8bn. Green bonds comprise
44% of this market, with the first green
bond issued by Bancolombia for COP350bn(USD115m) in 2016. Two years later, the firstsocial bond was priced with a COP400bn(USD139m) deal from Bancoldex and in 2019,the national development bank Findeter
issued the first sustainability bond. Oneof the dominant issuers is the Republic ofColombia with sovereign green bonds totalling
USD549.4m. Climate Bonds explored theColombian sustainable debt market in detail in
its 2022 Colombian Sustainable Finance Stateof the Market report.143

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

33

The wider LAC GSS+ market overview
Country
Argentina

Barbados

BelizeBermudaBrazilBritish Virgin
Islands

Chile

Colombia

Costa Rica

Dominican
Republic

EcuadorEl Salvador

Green

SLB

SocialSustainability

Transition

TOTAL GSS+

USD issued

2.2bn

185m

63.4m

316.9m2.8bn# of issuers

15

2

5

4

26

# of bonds

28

5

11

4

48

USD issued

8.5m

73.2m

81m

# of issuers

1

1

2

# of bonds

2

2

4

USD issued

364m

365m

# of issuers

11# of bonds

1

1

USD issued

1.1bn

1.1bn

# of issuers

11# of bonds

2

2

USD issued

15.2bn11.9bn

699m

3.2bn

670m

31.9bn# of issuers

86

26

5

14

2

133

# of bonds

163

37

12

19

3

234

USD issued

780m

780m

# of issuers

22# of bonds

2

2

USD issued

12.7bn2.5bn

19.3bn8.5bn

43.2bn# of issuers

13

2

6

6

27

# of bonds

23

2

23

12

60

USD issued

1.2bn

142m

1.02bn

398m

2.8bn

# of issuers

9

2

10

3

24

# of bonds

17

2

18

4

41

USD issued

532m

300m

75m

125m

1.03bn# of issuers

4

1

1

1

7

# of bonds

4

1

1

3

9

USD issued

20m

300m

320m

# of issuers

2

1

10

# of bonds

14

1

72

USD issued

165m

565m

50m

780m

# of issuers

2

5

1

8

# of bonds

2

5

1

8

USD issued

20m

20m

# of issuers

11# of bonds

1

1*Totals do not always add up, given that one issuer may issue bonds withdifferent thematic labels and from multiple countries.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

34

Country
GuatemalaMexicoPanamaParaguay

Peru

Supranational

Trinidadand Tobago

Uruguay

TOTAL

Green

SLB

SocialSustainability

Transition

TOTAL GSS+

USD issued

700m

1.1bn

500m

2.3bn

# of issuers

1

2

1

4

# of bonds

1

2

1

4

USD issued

2.3bn

8.1bn

3.04bn17.8bn32.3bn# of issuers

10

15

6

17

48

# of bonds

18

25

16

67

126

USD issued

329m

50m

379m

# of issuers

3

1

4

# of bonds

13

1

14

USD issued

300m

300m

# of issuers

11# of bonds

1

1

USD issued

1.08bn

380m

67.9m

5.01bn6.5bn# of issuers

5

1

3

3

12

# of bonds

6

1

3

5

15

USD issued

2.4bn

4.4bn

18.08bn

100m

25.08bn# of issuers

2

4

3

1

10

# of bonds

14

26

31

1

72

USD issued

44.2m

44.2m

# of issuers

11# of bonds

1

1

USD issued

337.8m1.49bn15m

1.8bn# of issuers

4

1

1

6

# of bonds

5

1

1

7

USD issued

42.4bn26.5bn29.9bn54.4bn770.4m154.1bn# of issuers

156*

53*

48*

57*

3*

284*

301

77

118

152

4

652

*Totals do not always add up, given that one issuer may issue bonds withdifferent thematic labels and from multiple countries.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative

35

Conclusions and outlook
By the end of 2022, Climate Bonds had recorded
GSS+ debt originating from Latin America with acumulative total of USD154.1bn. Sustainability
is the dominant theme with (35%) followed bygreen (28%), SLBs (17%), and social (19%). The
GSS+ market in the region continues to grow,and the LAC themed-market corresponded toaround 21% of the regional total bond market
of USD535.3bn between 2019 and 2022, whichsuggests great potential for sustainable financeto support climate objectives. Climate Bonds has
identified five recommendations to strengthen
and extend the LAC GSS+ debt market focusing
on definitions, policy development, innovative
instruments, transparency, and collaboration.

1. Establish definitions,standards, and criteria
A standardised approachto sustainable finance withclearer and harmonised
definitions can scale GSS+
finance. The key to developing
this route is making sure that
regional and local key actors are using a clear
set of definitions and criteria to prioritise thechanneling of resources to qualifying projects.
Standardisation can facilitate the structuringof sustainable securitisation instruments andaggregation facilities, scale financing for smaller
projects, and meet investor demand for larger
tickets and longer maturities.
This enables investors to make use of thecommon definitions and scientific criteria to
identify sustainable development opportunities.
Equally, it allows issuers to more easily
aggregate projects and assets suitable for the
inclusion in sustainable instruments sold in
the capital markets for which the proceeds areused to further lending capacity, potentially at
preferential rates.

2. Supportive policies
Public policy has the power
to guide the capital market
toward sustainable transition,
by attracting investors,
supporting the identificationof pipeline and fast tracking,and incentivising and de-risking green andsustainable projects and assets.

To accelerate the transition, governments canissue labelled sovereign bonds, implementfiscal incentives for the use of low-carbon
technologies, provide de-risking facilities andguarantees for sustainable debt, introduce green
requirements in tenders and public procurement
processes, and develop taxonomies. Thesepublic interventions send a market signal andmake a substantial contribution to achieving
sustainability targets by providing consistency
for sustainable investments through taxonomies,
so that green public procurement can drive
investment in specific sectors. By implementing
policies such as subsidies to guarantee
preferential treatment or establishing credit
rating requirements, national and supranational
governments can eliminate entry barriers
associated with regulation and issuance costs inthe sustainable finance market.
In this way, governments and other key actors
create an enabling environment for increased
utilisation of guarantees, as mandated by the
G20, serving the purpose of reducing transaction
risks and promoting greater financial inclusion.
Investment in research and development, andgradual implementation of mandatory criteria
for project development and prioritisation of
investment portfolios, can help ensure the longterm bankability of projects, prevent higher costsof maladaptation to climate change and the risksof a late economic transition.

3. Enhanced disclosure
All stakeholders have a role inpromoting transparency in themarket. Entities must strive tomeet the required standardsof clarity in the disclosureof their UoP to reassure
investors of the legitimacy of their commitments
and enable comparison across deals. Equally,
standardisation of disclosure metrics would
make it more attractive and easier for entities
to access thematic debt markets. The IDB’s
GBTP establishes a key instrument to support
standardised disclosure, and clarity around the
UoP of thematic deals. Stock exchanges andregulators have a role to support the adoption
and adherence to such international standards.
Their support is vital in ensuring the usability andeffective application of taxonomies, providing
clarity to the investment community.

4. SLBs and transition bonds
SLBs and transition bonds
can address capital needs
for transitioning industries
while ensuring credibility andalignment with sustainability
goals. The flexibility of the UoP
offered by the SLB structureoffers the potential to channel
financing via thematic debt tothe entities operating in thehard-to-abate sectors in LAC.
The application of the CBS v4
to financial instruments, sectors, entities, andsolutions, will enlarge the investable opportunity
set and give investors even more reasons tocommit to sustainable investment mandates.

5. More sovereign bonds
Governments must support
the transition to net-zero byendorsing clear transition
pathways, fostering supportive
policies, ensuring future
demand for climate solutions,and addressing risks. Government can issue
sovereign GSS+ bonds to demonstrate leadershipand stimulate market creation. The seven LAC
nations that have already entered this space havemade an enormous impact, by encouraging local
participation, attracting international investors,
and contributing to the visibility and success ofthe market. However, there remains a challenge
in continuing to build institutional capacities
in terms of commitments, inter-institutional
relationships, and interoperability. The region
has emerged as a leader in sovereign bonds.
The sharing of experiences among countries canprovide support to nascent markets, particularly
after the initial issuance, and ensure sustained
growth and success.

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative36

Appendix - List of A&R keywords for screeningof Climate Bonds databases
Sector

Keywords/Terms

Sector

Keywords/Terms

Sector

Keywords/Terms

General A&R
terms

Adaptation
Resilience
AnR
A&R
Adaptive
Resilient
Climate risk
Exposure
Hardening
HazardClimate proofing
Vulnerability
Redundancy
Redundant
TCFD

EnergyDistributed generation
Distributed PV
Microgrids
Minigrids
Energy storage
Underground cabling
Structural strengthening

Infrastructure
and built
environment

Agriculture,
forestry,land use,and natural
resource
management

Soil conservation
Climate-smart agriculture
Agricultural insurance
Climate-resilient rural
infrastructure
Drought resistant crops
Non-perennial crops
Regenerative agriculture
Soil sequestration
Wild brush clearing
Species diversification
Afforestation
Reforestation
Mangrove conservation
and replanting
Restoration of natural
habitats
Pest control measures
Regeneration or extensionof natural forests
Sustainable aquaculture
Ecosystem-based
adaptation
Integrated water resourcesmanagement
Ecosystem Services
Soil Erosion
Biodiversity
Evapotranspiration
Land degradation

Green roofs and walls
Water retention gardens
Porous pavements
Reduce urban heat zones
Grid resilienceBack-up generationand storage
Increased coolingrequirement
Urban flood protection
Climate-resilient urban
infrastructure
Resilient shelters
Natural infrastructure
Green infrastructure
Natural assets
Wildlife buffer zone

CoastsCoastal natural
buffer zones
Flood warning systems
CoastalSetbacks
Managed realignment
Flood shelter
Cyclone shelter
Slope management
Coastal protection
Wetland protection
Marine protected area
Artificial reef

Industry

Supply chain resilience
Business continuity
planning
Climate-related physicalrisk assessment
Climate-related transition
risk assessment

Socialresilienceand wellbeing

Social protection
WelfareLivelihoods
Disease surveillancesystems
E-Health
Rapid diagnostic tests

Disaster risk
management
andinsurance

Early warning system
Weather monitoring
Weather forecast
Flood forecasting
Drought monitoring
Climate monitoring
Climate modelling
Relocation
Managed retreat
Climate Information
SystemParametric insurance
Index insurance
Catastrophe insurance

Water

Drinking water
Stormwater drainage
Water treatment
Water loss reduction
Water conservation
Hydro-meteorologicalmonitoring
Rainwater harvesting
Wastewater treatment
Desalination
Flood control
Irrigation efficiency
Leakage management
Water efficiency
Wetland degradation

Latin America and the Caribbean Sustainable Debt State of the Market 2022 Climate Bonds Initiative37

Endnotes
1. These percentages are derived from calculations based on thejuxtaposition of Climate Bonds database and 2023 Bloomberg
Finance L.P. debt capital market data.
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Prepared by the Climate Bonds Initiative

Supported by the Inter-American Development Bank Group.

Authors: Valeria Dagnino Contreras, Alicia Lerner,
Julia Ambrosano, Daniel Costa, Sofia Borges and Diana Isaza

Acknowledgements to the IDBG: Ana María Zárate Moreno, Carole SanzParis, Gianleo Frisari, Angela Pinzón, Diana Carrillo Sosa, Valentina
Márquez, Sergio Quiros, Alexander Vasa, José Miguel Molina Fernández

Contributors: Andrés Felipe Sánchez, Adelaida Peláez, Iraís
Vázquez, Caroline Harrison, Stephanie Edghill

Suggested citation: Dagnino Contreras, V., et al, LAC Sustainable Debt Stateof the Market 2022, Climate Bonds Initiative July 2023.

Design: Godfrey Design, Joel Milsted© Published by Climate Bonds Initiative, August2023 www.climatebonds.net
Disclaimer: The information contained in this communication does not constitute investment advice in any form, and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation
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The Climate Bonds Initiative accepts no liability of any kind for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole
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