Basel/Bogota – The Inter-American Development Bank (IDB) and its private arm, IDB Invest, have contracted the Basel Agency for Sustainable Energy (BASE) to develop a system for classifying circular investments in Colombia.
The Basel Agency for Sustainable Energy(BASE), on behalf of the Inter-American Development Bank(IDB) and IDB Invest, is developing a system to identify circular investment projects in Colombia. It will help banks Bancóldex, Banco de Bogotá and Bancolombia identify financing options that meet circular economy goals, according to a media release.
Accordingly, BASE is to accompany the three banks in the implementation of the new categorization system in a pilot project. External reviewers such as the Colombian Asobancaria, the United Nations Environment Programme Finance Initiative(UNEP FI), and the Ellen MacArthur Foundation will also ensure that the taxonomy can benefit the entire Colombian banking sector and is consistent with the vision of the Latin America and Caribbean Circular Economy Coalition.
An overarching classification system is reportedly necessary because, to date, there are insufficient guidelines and methodologies that define the concept of circular economy in a consistent and standardized way to apply it.
In this context, the shift to a circular economy as a guiding principle for corporate development over the next 30 years is essential to reconcile economic growth and environmental sustainability. The financial sector has an important role to play here, as it can guide investment decisions into the “needed productive value chains to drive the incremental implementation of circular innovations.” ko
