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Latin American banks don’t know how climate change impacts their business
Despite advances in implementing ESG standards (environmental, social, and governance), Latin American banks still fail to evaluate and quantify the financial impact climate change can have on their business.
A report by the United Nations Environment Program Finance Initiative shows that the region’s banks tend to assess climate risks only from the perspective of how companies in their portfolio impact the environment. But they have a blind spot when it comes to quantifying their clients’ financial exposure to climate hazards.
Why it matters. Latin America is particularly vulnerable to the effects of climate change, both from a physical standpoint — with an increasing number of climate disasters being registered since 1980 — but also from an economic view.
- The transition to a low-carbon economy could be harsh on some of the region’s main economic sectors, such as agriculture and energy generation.
By the numbers. Unep-FI surveyed 78 institutions from 11 countries, excluding Chile, Colombia, and...