IntroductionAs part of the fight against climate change, several countries worldwide, including Colombia, have been working on furthering their commitment to reducing the consequences of climate change, including encouraging concrete environmental protection actions by all sectors. In Colombia, the Superintendence of Finance (“CSF”) has played a key role in the fight against climate change, as well as in building the strategy for the use of alternatives to mitigate its effects and promote the exercise of activities from the financial sector, aimed at the service of Environmental, Social and Governance (“ESG”) alternatives. On August 18th, 2022, the CSF published the roadmap document: “Towards the Greening of the Colombian Financial System” (the “CSF Roadmap”), addressing implementation strategies to be incorporated as part of the DNA of financial sector entities. Said CSF Roadmap aims to develop and encourage green finance and climate change based on 5 categories implemented in banking, financial, and insurance institutions. The CSF Roadmap complements different actions taken in Colombia related to ESG financing, such as the “Green Taxonomy Document,” recently published by the National Government on April 11th, 2022, consisting of a ranking system for economic activities and assets through which investors and different actors in public and private sectors can identify green and sustainable investments to acquire commitments and strategies in environmental matters. For financial sector users, it will be key to know and incorporate environmental and ESG strategies since financial entities will soon implement ESG aspects in the risk evaluation assessment of their potential debtors/borrowers. This would be a further development of Circular 018 of 2021, through which the CSF established a new Comprehensive Risk Management System, which requires financial sector entities to evaluate environmental risks to which debtors´ payment capacity or borrowing projects may be exposed.
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