Increasing evidence of climate-change related events amid “a century of volatility” must lead investors to focus on mitigation, the head of London-based nonprofit Climate Bonds Initiative (CBI) told LatinFinance.
“We must continue to push on mitigation,” CEO Sean Kidney said in an interview. “The availability of mitigation investment is the big area. It is both resilience and social.”
“The heat is going to get worse, the floods are going to get worse, hurricanes are going to get worse… Hurricanes in the Caribbean right now are very severe,” he added.
Policy action in the past 10 years is starting to pay off, Kidney said, including measures by the Brazilian government and others in Latin America.
“We are beginning to make progress on facing climate change. Green bonds are a big part of it,” he said.
Brazil has raised $4 billion with sustainability bonds since November last year, when it made its market debut. The government has been working on taxonomy for sustainability finance, which is due to be completed next year.
The country’s total ESG bond issuance jumped 61% to $34.9 billion in the first quarter of this year compared to the same period of 2023, according to CBI figures. For the broader Latin American region, a record $198.8 billion was raised in the same period, up 43% from a year earlier.
“We have seen growth this year, especially in Brazil,” Kidney said.
Chile and Mexico led the pack in terms of volume raised, with $60.4 billion and $44.1 billion respectively. In Chile, 46% of all government bonds are now green or sustainable bonds, he added.
Kidney also said multilateral lenders such as the Inter-American Development Bank make an important contribution as they help bring investors to the market and crowd-in the private sector.