Martín Guzmán, Minister of Economy; Miguel Pesce, BCRA's President; Adrián Cosentino, Head of the National Securities Commission (Comisión Nacional de Valores, CNV); and Adriana Guida, Head of the National Superintendence of Insurance (Superintendencia de Seguros de la Nación, SSN) signed a joint declaration to boost sustainable finance development in Argentina.
This agreement seeks to create conditions for increasing public and private investments within the financial sector. This will contribute to reaching economic, environmental, and social objectives within the framework of the Sustainable Development Goals (SDGs); and to addressing climate change through the financing of mitigation and adaptation strategies.
The joint declaration signed by the regulators of the banking, insurance, and capital markets sectors is in line with the work of the Technical Group for Sustainable Finance created in 2020 and led by the Ministry of Economy, with the support of the Inter-American Development Bank (IDB).
In this sense, Guzmán said, “This joint declaration to boost the development of sustainable finance in Argentina is also a step forward to sustainable growth.” Moreover, the minister highlighted, “we should face the challenge to design and promote economic and financial instruments that may facilitate public and private investments towards initiatives promoting sustainable development, since productive transformation for environmental sustainability is not only a matter of development but also of macroeconomic stability.”
In turn, Pesce asserted that the signing bodies are “addressing a joint work aimed at incorporating and managing environmental, social, and climate related risks from a micro and macro prudential perspective, a key issue to the development of a resilient and stable financial system.” He went on to add: “I am very pleased with this joint commitment to further the development of sustainable finance, which may promote the involvement of the different players in the system and, hence, to channel resources and investments towards green, environmental and social projects and activities.”
Cosentino pointed out: “this agreement represents a landmark and a renewed challenge for the CNV and the capital market”, noting that sustainability on our strategic agenda, creates specific instruments and training, and broadens our approach by incorporating environmental, social, and governance goals in investments decisions. He added, “We create financial products to channel capital to finance projects with an environmental/social positive impact and to promote tools to incorporate them in the corporate and investment decisions.”
In turn, Guida highlighted,“Insurance plays a key role in the transition towards an economic sustainable model through the promotion of financial inclusion, shaping a social and environmental world capable of adapting to positive changes for future generations.”
In this sense, the joint declaration seeks to promote an adequate incorporation, management, regulation and supervision of the risks related to environmental, social and governance (ESG) criteria, including financial and balance of payments related risks connected with the climate in order to design policies to strengthen, develop, and stabilize the Argentine financial system.
Moreover, the bodies undertook to develop a long-term joint agenda that may enable supervised institutions to develop the necessary capabilities to identify, manage, and incorporate the ESG criteria in their business strategies.
The signing bodies have agreed to assess potential risks to the stability of the financial system and the balance of payments connected with ESG factors, including financial risks related to the climate and the transition towards a low-carbon economy. If necessary, supervision and/or regulation actions to mitigate the impacts will be established.
The agreement promotes communication channels, joint work mechanisms, and coordination between the public and private sectors to follow the criteria related to sustainable finance as a key element in the long-term development strategy of the Argentine financial system.
The agreement will contribute to the design of a national strategy to develop sustainable finance in Argentina and raise awareness of these risks among the different players in the banking, insurance, and capital market sectors so that regulated and supervised institutions are able to adequately identify and manage these risks and include them in their credit and investment decisions.
Rafael Brigo, Secretary of Finance, and Maia Colodenco, Head of the Unit of International Affairs of the Ministry of Economy, were also present at the event.
The Technical Group for Sustainable Finance is a permanent mechanism for the exchange of information, discussion, coordination, and assessment of public policy actions, strategies, and activities aimed at developing and strengthening sustainable finance in Argentina. The group is led by the Ministry of Economy, and comprises the following bodies: the CNV, the SSN, the BCRA, Banco de la Nación Argentina, Banco de Inversión y Comercio Exterior (BICE), the Strategic Affairs Secretariat—National Presidency—, the Ministry of Productive Development, the Sustainability Guarantee Fund (Fondo de Garantía de Sustentabilidad, FGS), and the Ministry of the Environment and Sustainable Development of Argentina as permanent members.
September 7, 2021.