Sevanto observes a burgeoning recognition amongst corporates in the region that sustainability is good for business alongside increasing investor appetite to lend to sustainable companies because they represent an opportunity to create value, differentiate and lead.

IDB Invest provides and mobilises finance to private sector businesses (the organisation has around 400 regional clients across 25 countries) on the condition they integrate ESG policies and environmental and social risk management into their business, identifying, mitigating and incorporating sustainability across the board.

The organisation also plays a key role supporting private companies to develop their own resources to actively manage all aspects of sustainability from conducting impact assessments to addressing labour conditions and managing biodiversity. Capacity building via knowledge sharing and advisory services is a crucial element of the work, explains Sevanto, who says IDB Invest also supports corporates in the region tap the bond market. This might include helping them integrate the right frameworks and build reporting capacity.

IDB Invest is also an active issuer of its own bonds where the team aim to support the development of the local market and highlight innovation. For example, IDB Invest has issued over a billion dollars in Mexico’s bond market where highlights include selling a social bond targeting gender equality and the empowerment of women in Mexico in 2021.

That same year, IDB Invest set up a sustainable debt framework to support its growing green, social and sustainability issuance and provide investors with a single, integrated allocation and impact report. The organisation wanted to grow its funding programme, boost its branding in capital markets, and raise institutional funding in a crowded debt capital market that included big players like the EIB, World Bank and KfW. Since then, around US$5bn of issuance (around two thirds of total issuance) has gone through this model.

IDB Invest was the first organisation to issue a blue bond in Latin America in a reflection of the region’s vast coastal community, and last summer sold bonds to help finance private sector sustainable businesses in the Amazon. In a reflection of growing investor demand, although both these bonds were issued in local currency, they both attracted offshore investment.

“We want to highlight the importance of providing economic opportunities in the private sector in the Amazon to help support the preservation of rainforest,” he concludes.