Protected Agriculture: Mexico
The Climate Bonds Standard & Certification Scheme’sProtected Agriculture Criteria for Mexico
Criteria document
May 2019

Assurance/Integrity/Transparency
Assessing climate change mitigation
and adaptation aspects of financial
products is not straightforward.
The benefit of having an authoritative
standard eases decision-making andfocuses attention on credible climatechange solution opportunities. The
easier it is to use the faster the market
will grow.
The International Climate Bonds
Standards and Certification Scheme
assures investors that their funds areIn collaboration with:

Supported by:being used to help deliver a lowcarbon economy.
It allows investors and governments
to easily prioritize climate and green
bonds with confidence that the funds
are being used to deliver a low carbon
economy.
Certification is available for:• Project bonds• Corporate bonds (asset-linked)• Portfolio bonds• Asset-backed securities• Sovereign (programmatic) bonds.

Criteria are available for wind andsolar assets. Other key investmentareas soon to be released include
energy effciency in buildings andindustry, low-carbon transport,
bioenergy, water infrastructure andsustainable agriculture.
The Standard is an environmental
standard. It does not substitute forfinancial or other due-diligence.

PROTECTED AGRICULTURE CRITERIA OF THE CLIMATE BONDS STANDARD

Table of Contents
1. Definitions ........................................................................................................................... 2
2. Introduction ........................................................................................................................ 3
2.1 The Climate Bonds Standard ............................................................................................................3
2.2 This document and supplementary information available .....................................................................3
2.3 Revisions to these Criteria...............................................................................................................3

3. Scope of the Mexican Protected Agriculture Criteria .............................................................. 4
3.1 Key elements to the Criteria............................................................................................................4
3.2 Assets in scope ...............................................................................................................................4
3.3 Assets out of scope.........................................................................................................................53.4 Alignment with other Sector Criteria................................................................................................5

4. Eligibility Criteria for Mexican Horticultural Greenhouse Assets .............................................. 5
4.1 Mitigation Component.....................................................................................................................54.2 Adaptation & Resilience Component.................................................................................................6
4.3 Recommended best practice ............................................................................................................6Appendix 1: Criteria Reviewers ................................................................................................ 7

In collaboration with:

Supported by:1

PROTECTED AGRICULTURE CRITERIA OF THE CLIMATE BONDS STANDARD

1. Definitions
Climate Bonds Initiative (CBI): An investor-focused not-for-profit organisation, promoting large-scale investments that will
deliver a global low carbon and climate resilient economy. The Initiative seeks to develop mechanisms to better align theinterests of investors, industry and government so as to catalyse investments at a speed and scale sufficient to avoid
dangerous climate change.
Climate Bond: A climate bond is a bond used to finance – or re-finance - projects needed to address climate change. They
range from wind farms and solar and hydropower plants, to rail transport and building sea walls in cities threatened by rising
sea levels. Only a small portion of these bonds have been labelled as green or climate bonds by their issuers.
Certified Climate Bond: A Climate Bond that is certified by the Climate Bonds Standard Board as meeting the requirementsof the Climate Bonds Standard, as attested through independent verification.
Climate Bonds Standard (CBS): A screening tool for investors and governments that allows them to identify green bonds
where they can be confident that the funds are being used to deliver climate change solutions. This may be through climatemitigation impact and/ or climate adaptation or resilience. The CBS is made up of two parts: the parent standard (ClimateBonds Standard v2.0) and a suite of sector specific eligibility requirements. The parent standard covers the certification
process and pre- and post-issuance requirements for all certified bonds, regardless of the nature of the capital projects. TheSector Criteria detail specific requirements for assets identified as falling under that specific sector. The latest version of theCBS is published on the Climate Bonds Initiative website
Climate Bonds Standard Board (CBSB): A board of independent members that collectively represents $34 trillion of assets
under management. The CBSB is responsible for approving i) Revisions to the Climate Bond Standard, including theadoption of additional sector Criteria, ii) Approved verifiers, and iii) Applications for Certification of a bond under theClimate Bonds Standard. The CBSB is constituted, appointed and supported in line with the governance arrangements andprocesses as published on the Climate Bonds Initiative website.
Climate Bond Certification: allows the issuer to use the Climate Bond Certification Mark in relation to that bond. Climate
Bond Certification is provided once the independent Climate Bonds Standard Board is satisfied the bond conforms with theClimate Bonds Standard.
Green Bond: A Green Bond is where proceeds are allocated to environmental projects. The term generally refers to bondsthat have been marketed as “Green”. In theory, Green Bonds proceeds could be used for a wide variety of environmental
projects, but in practice they have mostly been the same as Climate Bonds, with proceeds going to climate change projects.
Technical Working Group (TWG): A group of key experts from academia, international agencies, industry and NGOs
convened by the Climate Bonds Initiative. The TWG develops Sector-Specific Criteria - detailed technical criteria for theeligibility of projects and assets as well as guidance on the tracking of eligibility status during the term of the bond. Their draft
recommendations are refined through engagement with finance industry experts in convened Industry Working Groups andthrough public consultation. Final approval of Sector Criteria is given by the CBSB.
Protected Agriculture: a general term that encompasses horticultural greenhouses and refers to a variety of crop
production technologies and techniques in which partial or full control of the plant micro-climate targets species’requirements, greatly improving growing conditions relative to open field agriculture. By reducing variability (e.g. in soilconditions, water availability, temperature, evaporation, pest and disease vectors, input use efficiency) and protecting crops
from different environmental, biological and climatological elements, greenhouses and other forms of protected agriculture
can: (i) achieve higher and more consistent productivity; (ii) meet market demand for crop quality and timing; (iii) increase
control over sanitary and phytosanitary conditions; (iv) reduce crop risk and damage.
We would like to thank all the reviewers of the Protected Agriculture Criteria for their time and valuable expertise that
helped shape these Criteria. A full list of the reviewers can be found in Appendix 1. The Climate Bonds Initiative gratefully
acknowledges the important contributions of Lawrence Pratt, Juan Manuel Ortega, and Isabelle Braly-Cartillier to theseCriteria, and special thanks are given to Dr. Christine Negra (Versant Vision LLC), the lead specialist coordinating thedevelopment of the Criteria.
In collaboration with:

Supported by:2PROTECTED AGRICULTURE CRITERIA OF THE CLIMATE BONDS STANDARD

2. Introduction
2.1 The Climate Bonds StandardInvestor demand for Green Bonds & Climate Bonds is strong, and will increase in line with the delivery of quality products
into the market. However, investor concerns about the credibility of green labelling are also growing. Standards, assurance &certification are essential to improve confidence and transparency, which in turn will enable further strong growth in themarket.
The Climate Bonds Standard and Certification Scheme is an easy-to-use screening tool that provides a clear signal toinvestors and intermediaries on the climate integrity of Certified Climate Bonds.
The Climate Bonds Standard & Certification Scheme is an easy-to-use tool for investors and issuers to assist them inprioritising investments that truly contribute to addressing climate change, both from a resilience and a mitigation point ofview. It is made up of the overarching Climate Bonds Standard detailing management and reporting processes, and a set ofSector Criteria detailing the requirements assets must meet to be eligible for certification.
The Sector Criteria cover a range of sectors including solar energy, wind energy, marine renewable energy, geothermalpower, low carbon buildings, low carbon transport, and water. The Certification Scheme requires issuers to obtain
independent verification, pre- and post-issuance, to ensure the bond meets the requirements of the Climate Bonds
Standard.

2.2 This document and supplementary information available
This document details:• The current scope of protected agriculture assets and projects eligible for certification under the Climate Bonds
Standard – Section 3;• The specific Criteria under which these assets and projects are eligible for certification – Section 4.
Supporting information is available at [https://www.climatebonds.net/standard/protected-agriculture] as follows:• Protected Agriculture Background Document: contains the research and rationale done to determine the Criteria
in this document• Summary document introducing the Criteria for Mexican Protected Agriculture Assets• The Climate Bonds Standard V2.1: contains the requirements of the overarching Climate Bonds Standard• The Climate Bonds Standard & Certification Scheme Brochure: provides an overview of the Climate Bonds
Standard & Certification Scheme, of which these Criteria are a partFor more information on the Climate Bonds Initiative and the Climate Bonds Standard and Certification Scheme more
broadly, see www.climatebonds.net.

2.3 Revisions to these Criteria
These Criteria will be reviewed one year after launch, or potentially earlier if the need arises, at which point the CBI will takestock of issuances that arise in the early stages and any developments in improved methodologies and data that can increase
the climate integrity of future bond issuances. After the first review, the Criteria will be reviewed again periodically on aneeds basis as technology and the market evolves. As a result, the Criteria are likely to be refined over time, as more
information becomes available. However, certification will not be withdrawn retroactively from bonds certified under earlier
versions of the Criteria.

In collaboration with:

Supported by:3

PROTECTED AGRICULTURE CRITERIA OF THE CLIMATE BONDS STANDARD

3. Scope of the Mexican Protected Agriculture Criteria
3.1 Key elements to the Criteria
As a general principle, protected agriculture-related bonds will meet the requirements of the Climate Bonds Standard if theassociated assets and use of proceeds meet all the following requirements:••

Promote GHG mitigation through reduced emissions; andPromote adaptation to climate change and facilitate increased climate resilience in the systems in which they arelocated.

Complete details of the requirements are in Section 4 of this document.

3.2 Assets in scope
These Criteria apply to assets and projects relating to:•••Protected agriculture facilities in Mexico
Dedicated infrastructure and support facilities to protected agriculture in Mexico
The production of tomatoes, bell peppers, cucumbers, berries, and other horticultural crops that exhibit similarcharacteristics.

Further details of the scope are in Table 1, below.
Table 1 presents indicative protected agriculture related assets that could be included in a Certified Climate Bond, subject tomeeting the specific Criteria described in Section 4. Table 1 is provided for illustrative purposes and is not an exhaustive listof every possible asset that would be eligible. Bonds financing multiple projects may also have to prove compliance withother Sector Criteria to be eligible for Climate Bonds Certification. For example, if a bond included both protected
agriculture assets and water related assets on the same site it would be necessary for the issuer to prove compliance withboth the Protected Agriculture Criteria and the Water Criteria.
To guide the interpretation of the requirements, Table 1 provides signposting as follows:•••

A green circle indicates these assets, when fully described and documented, automatically meet the Criteria
requirements, with no further disclosure or documentation required
An orange circle indicates that the eligibility of these assets is conditional on meeting specific requirements
A red circle indicates that these assets are not eligible for certification under any circumstances

Table 1: Illustrative use of bond proceeds eligible under the Mexican Protected Agriculture Criteria
AssetsProtected agriculture,horticultural greenhouses
and shade-houses that
operate or are underconstruction to operate.

In collaboration with:

Example use of proceeds

Mitigation

A&R• The establishment, acquisition, expansion or ongoing management of protected
agriculture facilities in Mexico, including:§ PVC film or glass greenhouses§ Shade houses§ Systems for closure / isolation, precision fertilizer and other chemical use§ Non-soil substrates
The establishment, acquisition, expansion or ongoing management of infrastructure andsupport facilities dedicated to protected agriculture in Mexico, including:§ Air and light control systems§ Precision plant nutrition systems§ Insect protection

Supported by:

4

PROTECTED AGRICULTURE CRITERIA OF THE CLIMATE BONDS STANDARD

3.3 Assets out of scope
Table 2 presents the assets and projects that are not eligible for Certification under the Protected Agriculture Criteria.
Table 2: Assets and projects not eligible for Certification under the Mexican Protected Agriculture Criteria
Assets/projects

Explanation for exclusion

Pesticide or fertilizer
production

Pesticide or fertilizer production is considered out of scope of the Protected Agriculture Criteria even if theproduction is dedicated to protected agriculture facilities. It can be a very energy and chemical intensive
process and these Criteria do not have requirements to ensure that process is low carbon or climate resilient.

3.4 Alignment with other Sector Criteria
Table 3 explains where potential crossovers with other Climate Bonds Standard Criteria could be and presents which
Criteria apply to these assets and project types.
Table 3: Assets and projects related to protected agriculture, but eligible for Certification under other Sector Criteria
Assets/projects

Covered under…

Explanation

Installation vehicles

Low Carbon
Transport Criteria

Vehicles must comply with the Climate Bonds Standard Low Carbon Transport Criteria.
They are not automatically eligible under dedicated support facilities, as can have material
impacts on the emissions profile of the crop production if they are not low emission
vehicles.
The Climate Bonds Standard Water Criteria are designed to cover all types of water
infrastructure, including drip and micro-aspersion irrigation. To prevent confusing
crossovers all water infrastructure will remain certifiable under the Water Criteria.

Irrigation and other water
related infrastructure

Water Criteria

4. Eligibility Criteria for Mexican Horticultural Greenhouse Assets
To demonstrate compliance with the following Criteria, in accordance with the Climate Bonds Standard V2.1, it is theissuer’s responsibility to provide the information to prove compliance with each component of these Criteria. Verifiers must
include this information in the scope of verification.
In accordance with the overarching reporting timetable as laid out in the Climate Bond Standard V2.1, issuers are required
to provide this information as follows:•••

Pre-issuance reporting (supported by independent verifiers report): Full disclosure information.
Post-issuance reporting (supported by independent verifiers report): Any amendments to the information provided
pre-issuance to be disclosed.
Annual reporting thereafter: Any amendments to the previously provided information should be reported byexception as changes arise.

4.1 Mitigation Component
Assets listed in Table 1 with an associated orange circle in the mitigation column must adhere to the following requirements:
1.
2.
3.
4.

Operations are fully enclosed with permeable or non-permeable air envelope and designed for year-roundproduction
Where heating is used, it is only for defense against cold in winter months
Only uses passive cooling, active ventilation is permitted only for managing heat and relative humidity
Where irrigation1 is used, it must be drip, micro-aspersion or fertigation only, with monitoring

In collaboration with:

Supported by:5

PROTECTED AGRICULTURE CRITERIA OF THE CLIMATE BONDS STANDARD
5.

Commitment to reuse or recycle used plastic sheeting and tubing, with a demonstrable policy or plan

Notes: Heating of a greenhouse can be provided either by passive or active modes. A passive mode uses the sun’s rays toheat a surface inside the greenhouse directly. In comparison, an active mode uses additional thermal energy, which is fed inside
the greenhouse using an air or water heating system.

4.2 Adaptation & Resilience Component
Compared to open-field production, greenhouses and other forms of protected agriculture represent a favorable strategy
for increasing resilience through the following: (i) Greatly reducing vulnerability and increasing resilience to changing
meteorological conditions and related physical (e.g. soil erosion) and pathogen (e.g. insects, bacteria, fungi) impacts; (ii)Reducing water consumption through efficiency and recovery; and (iii) Improving farm income through productivity
increases, improved crop price based on quality and seasonality, and reduced crop damage and loss.
For these reasons, there is just one requirement on the adaptation & resilience component:
1.

No use of chemicals in the Stockholm Convention2 or 1a or 1b in the WHO classification of pesticides by hazard3.
Compliance with the Rotterdam Convention4 where relevant.

4.3 Recommended best practiceFor higher levels of transformative impact it is recommended that issuers also comply with the below:
1.
2.
3.
4.

Sealed operations with non-permeable soil cover and integral (non-permeable air envelope
Production in substrates
Use water recovery and re-use systems
Disclose the use of chemicals in class 2 of the WHO classification of pesticides by hazard5

Issuers that do comply with any of the above should disclose this to demonstrate their best practice.
Climate Bonds Certification is not dependent on compliance with 4.3 and verification will not check compliance with 4.3.

http://www.pops.int/
https://www.who.int/ipcs/publications/pesticides_hazard/en/4
http://www.pic.int/
5
https://www.who.int/ipcs/publications/pesticides_hazard/en/
In collaboration with:
Supported by:236

PROTECTED AGRICULTURE CRITERIA OF THE CLIMATE BONDS STANDARD

Appendix 1: Criteria Reviewers
Peter Chege, Hydroponics Kenya
Rama Chandra Reddy, World Bank
Will Nicholson, Food Climate and Research Network
Henrik Selin, Boston University
Salvador Gonzales, Independent Consultant

In collaboration with:

Supported by:7