Last year many commitments were revealed by banks, some asset managers and corporations, who are trying to set a roadmap to develop a series of steps to achieve Net Zero Emissions by 2050. A very difficult goal that requires transformation within organizations, as Alba Aguilar Priego, Technical Secretary of the Green Finance Advisory Council (CCFV), considered.
He explained that incentives and aligned activities are required to develop the strategy. “Having net zero emissions requires the involvement of the entire value chain, suppliers and stakeholders and that everyone is aware that this is going to be the way forward. In addition to developing different initiatives, including seeking financing.
In interview with The Economistexplained that in some cases debt can be issued with different labels with different objectives and also develop a whole planning, “if the business strategy has to change and at a given moment, transform the way you are producing, it is necessary to modify the energy matrix if you are an important consumer of energy in the production process”.
Aguilar considered that in the case of banking, it has to get more and more involved with its clients and that they know that obtaining credit and financing will be conditioned by a series of requirements that were not previously in the discussion, where the financier needs know the use of the resources and also needs to know what the estimated impacts of that capital would be.
“Risk analysis becomes very important to be able to integrate all these variables such as environmental, social and governance variables that previously had a role, but today they have a preponderant role alongside financial variables,” he said.
So far in the first half of 2022, they already add up to about 77,000 million pesos in labeled bonds. Alba Aguilar said that they are seeing financing through debt with interest being tagged.
“We see that the Bonds Linked to Sustainability label has been a very popular label, since each company can define with its second opinion provider, its investment banking consultants, define what the KPI’s are, those key performance indicators that it has to overcome the company so that they are increasingly more sustainable”, he said.
He explained that companies are already focusing on what is material for each of the industries, financial materiality, that is, what can positively or negatively affect all returns, cash flows and that in these indicators Investors will be very aware, “in that materiality they are focusing today and they seek how to overcome those metrics that govern an industry.”
The financial markets are seeing new issues and also some new financial vehicles, “the Fibras (Infrastructure and Real Estate Trusts) are having a very clear invention of having a sustainability strategy, they have their infrastructure development plan in the real estate issue or in this new activity, reconfigure the constructions, the present assets that may be several years old”.
Corporate buildings and industrial buildings register demand, mainly in the Bajío and the northern border of the country. “It is changing the way of thinking of the states themselves, not only providing the physical space of the land, but also arming the services to the new manufacturers that bring the chip of sustainable production in those industrial buildings.”
Even, “the government issued the Bondes G and sends a positive signal to the market, where it offers transparency in the use and application of resources linked to the Sustainable Development Goals (SDG)”, he said.