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Last week, Paraguay’s Central Bank approved a Guide for Environmental and Social risk management, to be integrated within the credit risk analysis of financial institutions. For this effort, the Central Bank partnered with key organizations such as the Roundtable for Sustainable Finance and the Banking Association from Paraguay. FMO wishes to congratulate the Central Bank for this important step towards sustainable development.
As explained by Linda Broekhuizen, Chief Investment Officer at FMO “By critically screening their clients and servicing those clients who do not have affordable access to finance, banks can materially contribute to employment creation, reduced inequalities and climate action.”
Since 2010, FMO has been building capacity in its partner banks (and in the wider Paraguayan banking sector) for managing environmental and social impacts and risks associated with their investments. This work, done in close collaboration with leading NGOs such as WWF and other Development Financial Institutions (BID Invest, DEG), includes the strengthening of Environmental and Social Management Systems in partner banks and promoting the creation of a national sector initiative: the Roundtable for Sustainable Finance. Through this platform, FMO supported the creation of sector guides that present specific criteria for the sustainable financing for Cattle, Agriculture and Agro-Industry clients.
For more information on the guide and sector initiative in Paraguay, read the blog by FMO CIO, Linda Broekhuizen.