Strengthening financial systems by aligning them with the climate change goals of the Paris Agreement

The financial sector is an actor with a crucial role to play in achieving the goals of the Paris Agreement. This will require far-reaching transformation processes for the sector to be able to integrate climate risks, both transitional and physical, into its investment portfolios to the maximum extent possible. In addition, precise classifications that define what are sustainable-green investments and what are not (taxonomies) are of paramount importance to this process. This will allow the sector and countries in the region to benefit more from the opportunities created by economic transformations due to the transition, and will support access to climate finance for adaptation and mitigation.

In this context, UNEP in the framework of EUROCLIMA+, starting in Panama and Costa Rica and in pursuit of future scaling up, will support financial and insurance institutions, as well as environment and finance ministries and regulators to address this transformation. This will be done by promoting the creation of enabling conditions that strengthen the financial sector's commitment to climate action.

Main activities

A unified classification methodology for adaptation and mitigation will be developed. Subsequently, the proposed taxonomy will be applied to financial institutions through a test and pilot in the banking and insurance sector. Finally, a comprehensive set of recommendations on the taxonomy will be developed for regulators.
Furthermore, a framework for the identification, measurement and disclosure of risks related to the climate crisis will be developed. It will also provide a methodology for climate-related financial risk disclosure based on risk management methodologies developed internationally by UNEP FI under the framework of the TCFD Global Pilot Programme and develop a comprehensive set of national climate-related financial risk disclosure recommendations for regulators.
Finally, training will be provided for the finance, banking and insurance sector on climate taxonomy, financial flows, disclosure and management of climate-related financial risks, and lessons on how to transform both into financial products and operational processes.




The project will work with the Ministry of Environment, the Ministry of Economy and Finance, the Sustainable Finance Working Group of Panama (GTFS), the Superintendency of Banks of Panama, the Superintendency of Insurance and Reinsurance, the Panama Stock Exchange, the Banking Association of Panama and the Panamanian Association of Insurers.

Costa Rica

The project will work with the Ministry of Environment and Energy, the Central Bank of Costa Rica and the National Council of Supervision of the Financial System.


Partner institutions

Ministry of Environment of Panama, Ministry of Economy and Finance of Panama, Sustainable Finance Working Group of Panama, Superintendency of Banks of Panama, Superintendency of Insurance and Reinsurance of Panama, Stock Exchange of Panama, Ministry of Environment and Energy of Costa Rica (MINAE), Central Bank of Costa Rica, National Council of Supervision of the Financial System of Costa Rica.



Launch event – Climate Financial Risk Center in Latin America and the Caribbean

1 to 2 December, 2022