The Renewable Energy Innovation Fund (REIF) continues to deepen its strategy of institutional strengthening of the Uruguayan financial system, this time seeking to effectively integrate environmental and climate risks and opportunities into financial decision-making processes. Within this framework, REIF developed technical training for its partner banks -with whom it co-finances operations aimed at industrial, residential and transportation decarbonization- with the objective of advancing towards a real integration of ESG factors (environmental, social and governance) in risk management and investment evaluation.

The activity was led by Fred Seifert, partner at ERM and international impact expert, who is also a member of the REIF Investment Committee. With a perspective oriented to the financial sector, Seifert guided participants through two days of work on concrete tools and international frameworks that are setting the global course in sustainable finance, including IFRS S2 standards and the guidelines of the International Sustainability Standards Board (ISSB).

The sessions explored methodologies for the identification, measurement and management of physical risks -such as extreme events related to floods, fires or droughts- and transition risks, i.e. those arising from regulatory, technological and market changes associated with the transition to a low-carbon economy. The training also included the analysis of climate scenarios and their application as a strategic input for planning and financial decision-making.

The training was enriched by the participation of technical representatives from the National Directorate of Climate Change (DINACC), who shared studies and updated cartography on climate vulnerabilities in Uruguay, and from the National Directorate of Environmental Quality and Assessment (DINACEA), who presented the National Environmental Observatory as a key tool for monitoring and analyzing critical environmental variables.

One of the most nourishing aspects of the meeting was the space for dialogue and exchange generated, in which the operational challenges to adapt the current risk management frameworks and advance in the transversal incorporation of environmental variables within financial institutions were discussed.

At REIF, we understand that a just and sustainable energy transition requires not only financing, but also solid capacities in those who make decisions about where and how to invest. Therefore, we will continue to work collaboratively with our financial partners to promote tools, knowledge and frameworks for action that strengthen the role of the financial sector in building a resilient Uruguay aligned to the challenges of climate change.