Colombia
Press Release

Colombia launches green taxonomy plan

Bnamericas Published: Tuesday, April 12, 2022

This press release from Colombia's presidential palace was translated to English by an automated system

"Today Colombia is proud that here in New York this Green Taxonomy of Colombia is being launched, which is going to become a reference model for other emerging markets, hand in hand with the private sector, in Latin America."

This was stated this Monday by President Iván Duque during the international launch (at the New York Stock Exchange) of the document on Colombia's Green Taxonomy, a tool that facilitates the channeling of resources to achieve the country's environmental objectives.

The international launch of this initiative, led by President Duque before world investors, seeks to attract and mobilize greater resources, both public and private, for green projects and investments.

Colombia is the first country in the Americas to publish a Green Taxonomy. This is how the country becomes a regional leader in this matter, defining a classification system for economic activities and assets with significant contributions to the achievement of environmental objectives.

The Green Taxonomy is in line with the commitments, strategies and policies outlined by Colombia in environmental matters, guaranteeing compliance with high standards of international environmental sustainability and increasing transparency in these investments.

This Taxonomy stands out among the existing ones, because in addition to including sectors, assets and economic activities that contribute to the environmental objective of mitigating climate change, it will have an emphasis on land use, given that forestry, agriculture and livestock activities are responsible for 59% of Colombia's greenhouse gas emissions.

Launch of the Green Taxonomy is a milestone: President Duque

At the event, the President described the launch of this tool as "a milestone" and highlighted that "at this time we are the fourth country in the world to have a Green Taxonomy", which he defined as "a kind of genetic code, through which we are going to define all the public policy determinations that can be very valuable and that, in addition, can be demonstrated in any way in a carbon market”.

He explained that “this is the first time that an emerging market has embraced the Green Taxonomy, and it is the first time that we include things like biodiversity and livestock, water and land protection, as well as how we are increasing our energy matrix in a cleaner way”.

Likewise, he stressed that "this Green Taxonomy is the gateway for companies, assets and fixed-income bonds and capital markets to benefit from these securities and make this a reality."

He added that thanks to the Green Taxonomy, “investors from around the world will know with certainty what policies are being implemented in Colombia and how we are protecting rivers, moors, ecosystems, coral reefs; how we are combating deforestation and species, and expanding the mangroves”.

According to President Duque, green finance is making a difference, which is why "the way we are presenting our green finance structure is attracting all kinds of investors."

He concluded that "we are very pleased to demonstrate that this can be done hand in hand with the private sector", since "almost a third of the companies that are listed on the New York Stock Exchange are committed to becoming companies with net zero emissions.

With Green Taxonomy, Colombia continues to position itself as an environmental leader: Minhacienda

Present at the launch event was the Minister of Finance and Public Credit, José Manuel Restrepo, who stated that "Colombia continues to position itself as a leader in terms of financing mitigation and adaptation to the effects of climate change":

“Today we publish the first version of the Green Taxonomy to bring resources to projects, activities, initiatives and assets that contribute to meeting our environmental objectives, and joins other initiatives such as green bonds, a market that will be given greater dynamism, as well as as well as financial protection strategies against disaster risk”, said the head of the Treasury portfolio.

Catalyst of resources for the environmental agenda: Financial Superintendent

For his part, the Financial Superintendent of Colombia, Jorge Castaño Gutiérrez, stated that “the Green Taxonomy is the instrument through which we give order to the rules of the game so that issuers and investors develop a solid, transparent and integral green market, which allows them to exercise a catalytic role of the resources that the country requires to adequately face one of the most important challenges of this decade: climate change”.

Development of the Green Taxonomy

For the development of the Green Taxonomy, the environmental priorities of the country were identified, aligned with the commitments, strategies and policies outlined by Colombia in this field.

The environmental objectives identified are: mitigation of climate change, adaptation to climate change, conservation of ecosystems and biodiversity, water management, soil management, circular economy, pollution prevention and control.

In this sense, it has two pillars that complement each other and will evolve permanently.

In the first place, it presents seven sectors, assets and economic activities that contribute to the environmental objective of mitigating climate change: energy, construction, waste management and emission capture, water supply and treatment, transport, information and communication technologies. , and manufacturing.

Second, under a transversal approach, it presents three sectors of land use: livestock, agriculture and forestry. For these activities, five environmental objectives were taken into account: mitigation of climate change and adaptation to climate change, soil management, water management and conservation of ecosystems and biodiversity. It will be the first Green Taxonomy with an emphasis on land use, given that these sectors together are responsible for 59% of greenhouse gas emissions.

This tool becomes a very useful navigation chart for companies and issuers of securities, local and foreign investors, financial regulators, public and private entities, and financial consumers.

The Green Taxonomy will allow the leading players in the Colombian capital market to more easily identify which activities contribute substantially to the fulfillment of environmental goals, will facilitate the differentiation and classification of financial instruments designated as green, will increase transparency and will support the monitoring of investments. and green public spending.

The Green Taxonomy of Colombia is an inter-institutional effort, led by the Ministry of Finance and the Financial Superintendency, entities that also belong to the Green Taxonomy Table together with the Ministry of Environment, National Planning and DANE. In addition, it had the technical and financial support of the World Bank Group.

(With information from the Ministry of Finance).

(End/gaj/fca)

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