A new project to align Panama’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 private capital into the investments required to transit to a low emission and climate resilient economy and help Panama achieve its objective of being carbon negative by 2050.
The country faces high climate risks already apparent in numerous extreme weather events which are rapidly increasing in number and intensity. To manage and mitigate these risks, the project team will develop a framework for mapping, quantifying, and disclosing climate-related financial risks that will be tested by local banks and insurance companies.
Through these tools and methodologies the Panamanian financial sector will be provided with a guiding structure to mobilize private capital towards a low-emissions and climate-resilient economy. It will also prevent greenwashing, support the growth of domestic green financial markets, and increase the country’s attractiveness to international investors.
The project called “Aligning the financial flows of the Panamanian financial sector with the climate change objectives of the Paris Agreement” is to be led by the United Nations Environment Programme in Latin America and its Finance Initiative (UNEP FI), and financed by the Green Climate Fund and the European Union, through the EURO CLIMA Programme.
Read the full press release in Spanish here.