A new project to align the Costa Rican financial sector’s financial flows with the climate change objectives of the Paris Agreement has just launched to develop and implement a sustainable finance taxonomy to classify investments and economic activities that contribute to the country’s climate change objectives. The taxonomy will direct financial flows toward the necessary investments to achieve a sustainable, resilient, and inclusive national economy to support Costa Rica’s goal of achieving zero-emissions by 2050.

The contribution of private investment is crucial to achieving Costa Rica’s climate change objectives. The initiative aims to develop a national taxonomy of sustainable finance and support its implementation in the financial sector. At the same time, it will create a framework to map, quantify, and disclose climate-related financial risks.

These methodologies and tools will also be tested in the portfolios of banks and insurers to assess their exposure to these risks and define mitigation strategies. In this way, the Costa Rican financial sector will be provided with the necessary guidance structure to mobilize private capital towards a low-emissions and climate-resilient economy and to strengthen its capacity to adapt to the effects of climate change. The taxonomy aims to provide certainty to investors, prevent greenwashing, support the growth of national green financial markets, and increase the country’s attractiveness for international investors.

The project “Aligning the Financial Flows of the Costa Rican Financial Sector with the Climate Change Objectives of the Paris Agreement” is financed by the Green Climate Fund and the European Union through the EUROCLIMA Program.

Read the full press release in Spanish here.