MEXICO’S GREEN FINANCE ADVISORY BOARD JOINS FC4S
Mexico City, 31 July 2019 – Mexico’s Green Finance Advisory Board (CCFV) today joined the International Network of Financial Centres for Sustainability (FC4S) as it looks to help turn the Latin American nation into a regional green finance powerhouse.
The CCFV is the 28th member of the UN Environment Programme-convened movement to put private capital behind green investments. FC4S already boasts some of the world’s major financial centres as members.
“We are excited to have the opportunity to be part of the FC4S, and to work alongside them to reach our common goal to become a greener and more transparent financial system,” said Luis Sebastián Sayeg Seade, co-President of the CCFV and head of pension fund Afore Banamex.
“We are enthusiastic to become greener, because we know greener means challenging the status quo, while following global standards to improve every day. This benefits investors, the financial sector and, most importantly, local economies, the environment and the Mexican population.”
The advisory board, representing over 300 members, was created in 2016 in response to the growing need in Mexico to develop a sustainable financial market with an authentic long-term vision. The CCFV is particularly concerned about Mexico’s vulnerability to the impacts of climate change. Located between two oceans, it is exposed to storms and sea-level rise. The CCFV says 71 per cent of the country’s economy is vulnerable to climate-related disasters.
“The CCFV has brought together leaders that represent the financial system in order to share learning on how we can take action to manage and minimize climate and social risks,” said Enrique Ernesto Solórzano Palacio, co-President of the CCFV and pension fund manager Afore Sura CEO.
“We must work harder on taxonomies, improve data disclosure and the identification of sustainable and green infrastructure pipeline, and exercise pressure for the decarbonization of the companies that come to public markets to obtain funding.”
Beijing, Cairo, Lagos, Madrid and Tokyo have all recently joined FC4S in a surge of support for sustainable finance in line with growing global awareness of the urgent environmental challenges the planet faces.
The addition of the CCFV is particularly significant, given the size of the country’s economy. Mexico is currently ranked as the 15th largest world economy in terms of GDP, and 11th in terms of its purchasing power.
Since the Mexican Congress in 2012 approved the Climate Change General Law, green finance has been growing in Mexico. In 2015, national development bank NAFIN issued its first green bond – the first certified green bond in Latin America.
In 2016, with the formation of the CCFV, the pace picked up as the CCFV developed a green finance agenda – incorporating the financial system´s associations, development and multilateral banks, investment bankers, asset managers, rating agencies, and non-governmental organizations.
In 2017, Mexico City placed its first green bond, becoming the first Latin American City to obtain financing through this instrument. There have been other important advances and key signals to the market around green finance. For example, the National Commission of the Savings System for Retirement, the regulatory body of the Retirement Funds, encouraged the integration of ESG (Environmental, Social and Governance) concerns in investment decision-making. By December 2018, 51 institutional investors – who jointly manage USD 237 billion in assets, declared themselves in favor of the disclosure of ESG information in cooperation with the CCFV.
Less than a year after Mexico City’s first green bond, the Central Banks and Supervisors Network for Greening the Financial System (NGFS) was launched. This network is steered by Banco de Mexico, the Bank of England, the Banque de France and Autorité de Contrôle Prudentiel et de Résolution (ACPR), the Nederlandsche Bank, the Deutsche Bundesbank, Finansinspektionen (The Swedish FSA), the Monetary Authority of Singapore, the People’s Bank of China and Banco de España and has 42 members along with 8 observers.
“We are delighted to have the CCFV join our network,” said Stephen Nolan, head of FC4S. “They have already done stellar work promoting green and sustainable finance in Mexico. We hope to help them advance the agenda further in the region, while also learning from the many valuable steps they have taken to green Mexico’s financial system.”
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