03/07/2023

Promoting investment in biodiversity conservation and climate action

Stock exchange board

The project ‘Impact investments for the sustainable use of biodiversity in Peru’ organises events for various target groups in Peru in order to promote the topic of sustainable finance and biodiversity conservation.

Developing a national green taxonomy in Peru

The Peruvian Government has started developing a national green taxonomy that is intended to help ensure the flow of funding for green projects. The Government aims to give investors clear guidelines about which activities are truly ‘green’ and how greenwashing can be prevented.

The initiative was launched in October 2022 with two events, attended by more than 150 actors from public administration and the finance and manufacturing sectors, who discussed a classification system for green finance.

The main goal of these events was to encourage the various interest groups to participate in the sectoral technical committees, who would then be able to establish a classification system for economic activities. This system would define criteria and indicators capable of measuring the contribution of individual economic measures to climate change mitigation, adaptation to climate change and the conservation of biological diversity.
 

Green Finance Roadmap 

Henry Espinoza, Representative of the Peruvian Ministry of Economy and Finances, noted that the primary goal of his sector consists of using competitiveness and productivity to secure the wellbeing of the Peruvian population, with a Green Finance Roadmap that establishes a sustainability pathway for the sector being a key part of this initiative. The Peruvian Ministry of Environment published the Green Finance Roadmap to facilitate the incorporation of environmental indicators into financial operations.

Together with the sectoral committees, the Peruvian Ministry of the Environment will set environmental criteria for seven primary sectors, which have been chosen based on their significance for the economy, their environmental impact and emissions reductions. The sectors in question are: energy, building, process manufacturing, AFOLU (agriculture, forestry and land use), water, transport and telecommunications.

A green taxonomy is a key element for Peru's Green Finance Roadmap. Pictured: Participants at the event on the topic.

The role of the financial sector in developing this taxonomy was highlighted, since this sector has the know-how needed to assess how green issues intensify risks in the investment portfolios of the various sectors and within the national financial system. In this context, the Colombian Financial Supervisory Authority shared insights into their collaboration with banking and insurance regulators as part of creating a national taxonomy for green finance.

In a speech closing the event, Florian Theus, Head of the Section Development Cooperation at the German Embassy, emphasised the priority of climate and biodiversity as topics for the German Federal Government, noting the importance of a cross-sectoral approach that also involved the private sector and the use of initiatives that had already been successful in other countries. Theus also emphasised the broader scope of discussion made possible by agreements such as the German-Peruvian Climate Alliance, signed on November 2022, within the framework of the t. 

Matchmaking: bringing sustainable businesses and impact investors together

Following a comprehensive preparatory programme, entitled ‘Investment Readiness’, 32 biodiversity-friendly companies from various regions in Peru received training on how to present their business models to impact investors. 

Four key instruments were developed for this – Pitch, Pitch Deck, Impact Report and Data Room – which were then presented during the first matchmaking event, ‘Impact investment as a means of promoting more biodiversity-friendly business models’ held in Lima in November. 

This event aimed to bring the entrepreneurs and a total of 13 impact investors together in two separate event formats: bilateral interview rooms and a ‘shark tank’ presentation, where entrepreneurs pitch to a panel of impact investors. The aim was to ensure that both sides could discuss the best way to mobilise private finance – not least because this offers major potential for scaling up companies that are focusing on sustainable business models. 

Trust as a prerequisite for impact investment 

The event was opened by Carlos Giesecke, General Director for Finance and Environmental Economics at the Peruvian Ministry of the Environment, who emphasised the importance of mobilising public and private funds to conserve biological diversity and promote an increasingly sustainable economy.

José Alejandro Torres (Bamboo Capital Partners) also noted that the preparation for impact investment involves more than merely satisfying the formal requirements – a much more important goal was building trusted relationships between the people involved. And this was another key aim of the event, namely establishing long-lasting relationships between entrepreneurs and impact investment funds.

A podium discussion was also held during the event, with the participating experts debating the scope of loans, gaps in financing and the consolidation of initiatives in the field of impact investment. 

First contacts made

Thanks to the event, the BioInvest project was able to attract the interest of several potential impact investors, who will now be conducting due diligence on the businesses.

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