Finances and sustainability, a key issue for the financial sector

In order to promote a space of dialogue and refection, CAF, Development Bank of Latin America and the United Nations Environmental Programme, Financial Initiative (UNEP-FI), developed the seminar: "Beyond Finances: Sustainable Finances"

Bernardo Requena, CAF´s Director Representative in Ecuador, highlighted that the event is framed within the institution's strategy to promote sustainable development through a greater comprehension and management of the environmental and social risks and opportunities in the region. In this respect, he mentioned that CAF promotes training and courses related to environmental and social criteria in the financial sector that may be replicable in other institutions.

The first session included the attendance of Andres Hubenthal, Undersecretary of Climate Change at the Ministry of the Environment (MAE, for its acronym in Spanish); Pedro Solines, Superintendent of Banking and Insurances of Ecuador, and Rubi Hernandez, Regional Coordinator of UNEP FI for Latin America. 

Solines, as the highest authority of the banking regulatory entity in the country, called all the actors to join efforts to establish a regulation in the near future that enables credits, risk analyses, and creation of value to be compatible with the protection of the environment. 

The master conference of the event included the participation of Gustavo Portaluppi, expert in sustainable financing and UNEP FI consultant, who highlighted the role and importance of sustainability in banking.  "The relationship between sustainability and finances is a key topic, it is a great challenge, but possible if we face it in a timely manner". He added, "the financial sector has the capacity of closing the financing gap necessary for sustainable development, and to support the transition toward a low carbon economy". 

In addition, he mentioned the obstacles faced by financial institutions when implementing sustainability. However, he indicated that the benefits such as minimization of risk, reduction of costs, opening of new income sources, image improvement, and affinity with the community, have allowed more institutions to become aware about the importance of the sustainability of their operations. 

Janeth Pacheco, representative of the Association of Private Banks of Ecuador, stated that in the association all the banks are aware of the role they play in the economy. She mentioned that "growth cannot happen at the margin of issues related to sustainability and, therefore, it is necessary to establish public-private initiatives". 

At the same time, Angel Valverde, Director of Climate Change Mitigation at the Ministry of the Environment of Ecuador, considers that it is necessary to expand collaboration with institutions of the financial system (public and private) to establish the practices or standards that are necessary for the sector, that may be the base of knowledge not only for commercial banks but also for the small financial cooperatives to be able to implement sustainability in their management. 

Mauricio Velasquez, Coordinator of CAF´s regional program Environmental and Social Management for Financial Institutions, pointed out that the event complies with the mandate of the last UNEP FI Latin America work group, carried out in Colombia, where it was agreed that there has to be a space where the public and private sectors, and the Ecuadorean regulatory entities can exchange their ideas. 

Finally, Velasquez urged the participating entities to produce a document with the main conclusions of the seminar, which may become the first step in developing guidelines for sustainable finances in Ecuador.