Ecuadorian banks to implement new environmental and social policies
CAF-development bank of Latin America- and Banco del Pacífico signed a technical cooperation agreement to implement an environmental and social risk management system (SARAS) in loan operations of the Ecuadorian bank.
The agreement was signed by Bernardo Requena, CAF’s Director-Representative for Ecuador, and Efraín Vieira, CEO of Banco Pacífico, and calls for the design of a SARAS to be included in the loan approval process in Banco Pacífico. It also involves the design of a “green” financial product designed primarily for agribusiness, benefiting producers, and small and medium-sized enterprises in the sector.
According to Requena, this technical cooperation will allow Banco Pacífico to carry out an environmental and social assessment of projects to be financed in the agricultural sector, which is a crucial area for the country and the entire region. He also said that having a SARAS in place enables globally available environmental funds to be transferred to banks in Ecuador to finance environmental projects. Requena explained that the Green Climate Fund (GCF) has approximately USD 10 billion available to fund such projects worldwide. “These funds are allocated in places that are prepared to receive them, and Banco del Pacífico is working in that direction.”
In addition, the CEO of Banco del Pacífico said that one of the important features in restructuring the organization is taking steps towards goals that are beneficial for the nation, such as funding sources. He stressed that the environmental fund has a substantial amount available that could be used to help finance projects in Ecuador.
The agreement was signed in the framework of the Environmental and Social Management Program for Financial Institutions (PGASIF) of the Directorate of Environment and Climate Change, which supports and promotes the implementation of environmental and social management principles and practices in financial sectors in the region, as a strategy to make environmental and social principles and safeguards established by CAF for its operations be considered by the financial partners and clients of the Bank.
Since its inception, the PGASIF has trained about 3,000 people through online and classroom courses and various meetings. It has performed four status assessment of sustainable banking in the region and has supported the creation of two National Green Protocols in Latin America. Similarly, it has provided training for the incorporation of environmental practices in more than 120 financial institutions in the region, besides granting three Latin American Awards for Sustainable Finance, among others.
The PGASIF helps create a critical mass of banking professionals in the region, including senior management staff, who are able to promote the implementation of environmental and social measures in their institutions. It also works with financial regulators and banking associations, promoting pilot initiatives and the exchange of regional experiences on regulatory and voluntary actions in the field of sustainable finance for the financial sector.
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