Georgetown Americas Institute Co-Hosts Conference on Climate Change in Latin America
On April 12, the Georgetown Americas Institute and the Eurasia Group hosted the “Overcoming Challenges to Fight Climate Change in Latin America” conference, which brought together diverse stakeholders—including academics, policymakers, and business leaders from Latin America, the Caribbean, and the United States—to discuss topics such as recent trends in climate change policy and sustainability, climate change’s impact on the region, and how countries can respond to the global climate crisis. This event was co-sponsored by Sempra, as well as Georgetown University’s Earth Commons and the Global Human Development Program at the Edmund A. Walsh School of Foreign Service.
Understanding the Severity of the Climate Crisis
Barbados’ Prime Minister Mia Mottley highlighted the severity of the climate situation in her keynote remarks and noted that the increasingly extreme summers in Europe and harsh winters in North America should be a warning of what will happen if global warming reaches an irreversible point. Mottley also stressed the importance of small and domestic changes that make a cumulative impact, and she called on everyone to recognize that our current way of life is unsustainable.
The climate crisis must be understood as a multidimensional problem, one that concerns issues such as poverty, institutional development, and international and multilateral cooperation. Mottley stressed that the response must be equally multidimensional, requiring the world to put its political differences aside to work together for a common goal. As an example she pointed to the need for increased political will to push through reform of international financial institutions (IFIs), since most developing countries do not have the financial capacity to develop sustainable solutions or the fiscal flexibility to continue borrowing to do so.
“There is no politics in saving the planet.” - Mia Mottley, Prime Minister of Barbados
The prime minister’s other recommendations included making a loss and damage from climate change fund available for the developing world, encouraging philanthropic capital to fund climate initiatives, increasing access to climate financing to support resilience and adaptation initiatives, and expanding technology transfers to speed the transition to clean energy.
ESG Financing: Perspectives from Different Sectors
The first panel focused on environmental, social, and governance (ESG) financing. Featured panelists included Azucena Arbeleche, minister of economy and finance of Uruguay; Hilen Meirovich, head of climate change at Inter-American Development Bank (IDB) Invest; Lupin Rahman, executive vice president of PIMCO; and Dan Zelikow, chair of the governing board of J.P. Morgan Development Finance Institution. GAI Director Alejandro Werner moderated the conversation.
Arbeleche offered her experience implementing an ESG strategy in Uruguay, describing how IFIs can structure and leverage private markets to significantly multiply the effects of climate change policy. Arbleche emphasized that in Uruguay the government is seriously committed to climate action; as minister of economy and finance, her team has incorporated environmental issues in the way Uruguay trades, invests, and creates jobs. She encouraged IFIs to channel more resources from the international community that have been difficult to access for emerging markets through initiatives such as green loans and interest rates linked to environmental indicators.
Meirovich noted that IDB Invest had lent seven million dollars for climate action in 2022, though “it was just a drop in the bucket for what is needed in climate action.” She asserted that IDB Invest is committed to supporting private clients and governments in their energy transitions, acknowledging that “different players have different capacities and abilities.”
According to Meirovich, IDB Invest has three key areas of climate action: 1) working with financial institutions and intermediaries to design sustainable investments from the social and climate perspective; 2) testing new business models and technologies for climate change mitigation and bringing in other actors to have a collaborative ESG process; and 3) working on adaptation and resilience by establishing climate emergency clauses, stopping principal payments on climate loans, and supporting private sector recovery after a natural disaster. Meirovich concluded that for IDB Invest and other institutions to have the biggest impact, they should continue working on specific projects at the country level.
Rahman shared insights on the ways private asset managers approach ESG financing. She highlighted the growth of the green bond market in Latin America as regulations shift to promote sustainable disclosures in the corporate sector. She also recognized that more Latin American central banks are doing more green investments. Rahman believes that the biggest challenge for ESG strategy in Latin America is the technical capacity; emerging markets often do not have the bandwidth, capacity, or political will to implement a green framework.
“Through a development finance lens, we look at mitigation and resilience to be part of the development process.” - Lupin Rahman, executive vice president of PIMCO
Zelikow also addressed ESG financing in the private sector, such as J.P Morgan’s green bonds initiative with an energy company in Guatemala that has produced a 15% gain in green energy efficiency. According to Zelikow, this project was a great example of how J.P Morgan can apply its current environmental impact framework in a much broader way, taking advantage of investors’ dual interests in development impact and financial returns. He believes that there are commercial incentives in every step of the value chain that can promote participation in ESG financing.
Sector Trends for Climate Change Mitigation
The second panel on climate change mitigation featured Tania Ortiz Mena, president for Mexico of Sempra Infrastructure; Shari Friedman, managing director of climate and sustainability at the Eurasia Group; Anna Wellenstein, Sustainable Practice Group regional director for Latin America and the Caribbean at the World Bank; and Alejandra Vasquez, the global vice president of sustainability at Grupo Bimbo. This conversation was moderated by Daniel Kerner, head of the Latin America practice at the Eurasia Group.
Friedman first outlined global trends like a stronger focus on decarbonization and recognition that climate, biodiversity, and water issues are interconnected in their systemic impact on private companies. She asserted that companies are increasingly understanding the environmental impact of their business models and supply chains, which is in turn prompting them to change their resource usage.
Friedman also pointed to the current decoupling between the United States and China, which is pushing the United States to build supply chains in more friendly countries. Similarly, expanded Chinese involvement in the Russia-Ukraine war would be another significant push for nearshoring U.S. supply chains. She concluded by affirming that climate finance comes down to policy, and in the past decade countries have been advancing on what is needed to fight climate change, but not fast enough.
Wellenstein focused on governments’ response to climate change. She pointed out that climate change and global energy transition could create opportunities for Latin America in sectors like electrified transport and climate-smart agriculture. For example, if Peru would invest in sustainable development of its copper resources, its GDP could grow 10% by 2050. Wellenstein further urged Latin American countries to develop a deeper understanding on what environmental policy means for financial frameworks.
Ortiz shared her insights on global energy trends, emphasizing that “specific drivers for energy transitions are much more important than general, long-term aspirations.” For instance, Mexico has opportunities for nearshoring and free-trade agreements with the rest of the Western Hemisphere. She highlighted that Mexico’s long-term energy policy is geared towards achieving energy security; drawing on that experience, the country will likely have an important leadership role in Latin America’s energy transition.
“Mexico can become an exporter of clean energy to the United States.” - Tania Ortiz Mena, president for Mexico of Sempra Infrastructure
Finally, Vasquez shared how Grupo Bimbo, the largest baking company in the world, is implementing environmental best practices. Through initiatives such as Bake for Nature, Grupo Bimbo is making their supply chains and final products more sustainable by requiring fewer but equally nutritious ingredients. Vasquez shared the company’s ambitious public environmental and social commitments, including using 100% renewable energy and reaching net zero carbon emissions by 2050.
The conference on climate change brought together stakeholders from different professional and cultural backgrounds who provided insights on the future of climate action in Latin America and the Caribbean. The experts highlighted the severity of the climate crisis and the significant consequences that climate change will bring if governments, IFIs, and the private sector do not work together to find a solution. The speakers acknowledged the challenges Latin America faces in its fight against climate change, such as limited technical and financial capacity, fiscal flexibility, and political will, but they also highlighted the opportunities that the climate crisis can bring for the region, such as nearshoring and energy transition.
A full recording of the event is available on the GAI YouTube channel.