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Backcasting from Net-Zero: When to Demand Science-Based Ambition

Net-zero alignment represents the highest level of climate ambition for modern organizations. While many firms start with incremental improvements, leading enterprises adopt a strategic methodology known as backcasting. This approach starts with a vision of a decarbonized future and works backward to identify the necessary steps to reach that goal today. For financial institutions, backcasting serves as the primary tool for identifying borrowers who are truly committed to long-term sustainability and systemic change. Traditional business planning often relies on forecasting, which projects future performance based on current trends and historical data. While useful for short-term operations, forecasting often fails to account for the radical shifts required by the global energy transition. Backcasting solves this problem by centering the planning process on a fixed, science-based destination, such as achieving net-zero emissions by 2050. This approach ensures that every interim milestone contributes directly to the final objective. Why Backcasting Matters for Climate Finance The backcasting climate methodology is essential for mitigating transition risks within a financial portfolio. As global regulations tighten and carbon prices rise, businesses that rely on incremental forecasting risk becoming stranded assets. Backcasting forces an organization to confront the structural changes needed for survival in a low-carbon economy. Financial institutions use this methodology to verify the “Net-Zero ambition” of their largest clients. It provides a rigorous framework to ensure that a company’s long-term goals are more than mere marketing claims. By demanding science-based ambition, lenders protect their capital from the volatility of the fossil fuel phase-out. How to Implement the Backcasting Process Implementing a backcasting framework requires a shift in organizational mindset from “what is likely” to “what is necessary.” Lenders should look for the following five steps in a borrower’s strategic plan. Step 1: Define the Desired Future State The process begins with a clear, time-bound definition of success. For most organizations, this is a state where GHG emissions are reduced to the absolute minimum, with any residual emissions neutralized through high-quality carbon removals. The borrower must specify the target year, typically 2040 or 2050, in alignment with the Paris Agreement. Step 2: Characterize the Decarbonized Business Model The organization must describe how it will operate in the target year. This includes identifying the primary energy sources, the level of energy efficiency achieved, and the technological innovations required. A manufacturer, for example, might envision a future state where 100% of process heat comes from green hydrogen. Step 3: Work Backward to Identify Strategic Milestones Once the destination is clear, the organization works backward to set interim targets. These milestones act as “checkpoints” to ensure the company remains on the science-based pathway. Common intervals include 5-year and 10-year targets that satisfy the requirements of the absolute contraction method. Step 4: Conduct a Gap Analysis By comparing the future state with the current operational baseline, the borrower identifies the “innovation gap.” This step highlights the specific areas where the business requires new technology, policy changes, or significant capital investment. Identifying these gaps early allows financial institutions to structure the appropriate climate finance products to bridge them. Step 5: Develop the Immediate Action Plan The final step is translating the long-term vision into immediate operational tasks. This results in a Climate-Mitigation Action Plan (CMAP) that outlines the specific investments needed over the next 12 to 36 months. This plan must align with the broader Science-Based Target Setting Methodologies. When to Demand Backcasting from Borrowers While the Forward-looking methodology is suitable for many SMEs, certain scenarios require the more rigorous backcasting approach. Lenders should prioritize backcasting in the following situations: Risk Mitigation Benefits for Financial Institutions Demanding science-based ambition through backcasting provides three critical benefits to a lender’s portfolio: Conclusion The backcasting climate methodology is the gold standard for organizations aiming for Net-Zero leadership. By starting with the end in mind, businesses move beyond incrementalism and begin the deep work of transformation. For financial institutions, verifying this ambition is the most effective way to align portfolios with the global climate transition and secure long-term financial performance. This article was written by Matheus Mendes from the Green Initiative Team. Related Reading

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Forward-Looking Climate Methodology: A Guide for SMEs

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The transition to a low-carbon economy requires practical, actionable strategies that align with the current operational realities of a business. For many small and medium-sized enterprises (SMEs), the forward-looking climate methodology provides a realistic entry point into climate action. This approach focuses on what a company can achieve today based on its existing technical capacity and financial resources. Financial institutions increasingly favor this pragmatic path for their SME clients. It allows businesses to build momentum through immediate efficiency gains while establishing the data foundations necessary for more ambitious future targets. By focusing on tangible improvements, the forward-looking methodology turns climate mitigation into a driver of operational excellence. Understanding the Forward-Looking Climate Methodology The forward-looking approach differs from traditional science-based targets by starting with the present state of the organization. While science-based targets work backward from a future goal, this methodology looks forward from current capabilities. It prioritizes the identification of technical interventions that offer the highest greenhouse gas (GHG) reductions relative to their implementation cost. This capability-based planning is particularly effective for sectors with high operational variability. It allows managers to integrate climate goals directly into their annual capital expenditure cycles. This ensures that every sustainability initiative supports the overall financial health of the company. Step 1: Establish Your Technical Baseline Implementation begins with a thorough understanding of your current emissions profile. You must conduct a professional GHG inventory to identify the primary sources of carbon within your operations. Step 2: Identify “Quick-Win” Efficiency Gains The core of a pragmatist climate action plan is the prioritization of projects with short payback periods. These “quick wins” generate the internal buy-in and financial savings needed to fund more complex future interventions. Step 3: Conduct Technical Feasibility Studies Once you identify potential projects, you must validate their viability. Technical feasibility studies ensure that proposed interventions are compatible with your existing infrastructure. Step 4: Map Financial ROI and Carbon Impact A forward-looking climate methodology requires a clear link between environmental performance and financial sustainability. You must quantify the expected results of each intervention. Step 5: Draft the 5-Year Implementation Roadmap The final step is the creation of a Climate-Mitigation Action Plan (CMAP). This document serves as your strategic guide for the next several years. Pro Tips for Implementation Successful capability-based planning relies on continuous improvement. You should treat your first implementation cycle as a learning period. As your team gains technical expertise and your data systems become more robust, you can gradually increase the ambition of your targets. Integrating these results into your annual corporate reporting builds long-term trust with investors and clients. Conclusion The forward-looking climate methodology offers a stable and profitable pathway for SMEs to join the green transition. By starting with current capabilities and focusing on operational efficiency, businesses transform climate action into a competitive advantage. This pragmatic approach ensures that every step toward decarbonization also strengthens the financial foundation of the company. Ready to build your pragmatic climate roadmap? Contact our Team to identify your first five “quick-win” efficiency projects today. This article was written by Matheus Mendes from the Green Initiative Team. Related Reading

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MRV Systems: Building Infrastructure for Performance-Based Climate Finance

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The global transition to a net-zero economy has triggered a structural shift in climate finance. While early instruments focused on “Use of Proceeds”—where funds are earmarked for specific green projects—the market is rapidly maturing toward performance-linked products, such as Sustainability-Linked Loans (SLLs) and Sustainability-Linked Bonds (SLBs). In these structures, financial incentives—typically interest rate margins—are tied to the borrower’s achievement of predefined Sustainability Performance Targets (SPTs). To scale these instruments with integrity, financial institutions (FIs) require a robust Monitoring, Reporting, and Verification (MRV) infrastructure. As noted by the LSE Grantham Research Institute: “These margin ratchets can shift adaptation from a discretionary initiative to a priced managerial obligation, making climate resilience a financial variable rather than a reputational afterthought”. The MRV Infrastructure Roadmap: From Manual to Automated Building an MRV system for climate finance is an evolutionary journey. FIs must navigate three primary levels of sophistication to bridge the information gap between project sites and capital markets. Phase 1: Manual and Episodic Systems Traditional MRV relies on manual data collection, often involving paper logs, site visits, and spreadsheets. In this phase, verification is periodic and the “audit lag” can be significant, with verification cycles taking 12 to 24 months. While accessible for small portfolios, this manual approach is labor-intensive and prone to human error, creating asymmetric information risks that can lead to disputes over interest rate adjustments. For smallholder land-owners and project developers, these manual registration and audit costs are often “prohibitively expensive,” sometimes consuming 30–40% of total project revenues. Phase 2: Digitalized and Integrated Systems As portfolios grow, FIs transition to digitalized systems that utilize cloud-based databases and standardized reporting frameworks. This phase involves aligning borrower data with global standards like the Greenhouse Gas (GHG) Protocol and the Partnership for Carbon Accounting Financials (PCAF) to track financed emissions. Digital platforms begin to integrate third-party data, such as satellite-derived land-use changes, providing a more consistent baseline for performance tracking. Phase 3: Automated and Real-Time Systems (dMRV) The frontier of MRV infrastructure is the Digital MRV (dMRV) system. By “bridging the gap between real-world climate action and verifiable digital assets,” dMRV leverages the Internet of Things (IoT), Artificial Intelligence (AI), and blockchain. Automated sensors, such as smart meters on renewable installations, stream data directly into digital systems. This reduces verification cycles from years to months or even minutes, enabling dynamic financial modeling. Machine learning algorithms in these systems can boost audit accuracy by an estimated 79% over traditional manual samples. Infrastructure Phase Data Source Verification Cycle Primary Risk Manual Paper logs / Spreadsheets 12–24 Months Human error / Tampering Digitalized Cloud-based databases 6–12 Months Data fragmentation Automated (dMRV) IoT Sensors / Satellites 1–3 Months / Real-time Cybersecurity / Algorithm bias Core Components of the “Truth Layer” To structure performance-linked products with confidence, FIs must establish a reliable “truth layer” across three core infrastructure components: 1. High-Integrity Baselines and Performance Targets Every performance-linked product starts with a counterfactual baseline. In manual systems, research shows that median baseline uncertainty can span 171% of the mean estimate. High-integrity infrastructure uses multi-model ensemble approaches and historical geospatial data to reduce this variability and prevent over-crediting. Targets must be “SMART” (Specific, Measurable, Achievable, Relevant, and Time-bound). Furthermore, investors are increasingly distinguishing between “impact materiality” (stakeholder impact) and “financial materiality” (enterprise value) to ensure KPIs directly influence financial resilience. 2. Standardized Data Middleware Confidence requires seamless data flow between the project site and the FI’s core banking system. Middleware solutions act as “translators” between diverse digital dialects, such as mobile apps in JSON and legacy core systems in COBOL or XML. This architecture allows FIs to monitor portfolios and execute “internet audits” without disrupting their core financial data integrity. 3. Independent Verification Protocols The ultimate guarantor of trust is the third-party verifier. For performance-based finance, verifiers (VVBs) must be accredited under international standards such as ISO 14064-3 and ISO 14065. Beyond accreditation, VVBs must adhere to rigorous principles of “professional skepticism” and “impartiality,” ensuring that findings are objective and free of bias. Unlocking the “Last Mile”: The SME Finance Paradox Small and Medium-Sized Enterprises (SMEs) represent over 90% of the global productive fabric and serve as the “last mile” where national climate commitments translate into real economic action. However, a structural paradox currently restricts their access to capital: SMEs cannot access climate finance because they lack reliable emissions data and technical capacity, and they cannot build that capacity because they lack the finance to do so. Bridging this gap requires aligning financial architecture with SME realities by simplifying processes, standardizing disclosure criteria, and reducing transaction costs. Frameworks such as the Climate Mitigation Finance Guide provide actionable roadmaps to translate these transition ambitions into scalable, bankable assets for the global market. Financial Impact of Automated Infrastructure The integration of advanced technologies transforms MRV from a compliance burden into a financial strategic asset by fundamentally altering the speed and reliability of performance-based contracts. By codifying loan terms into blockchain-based smart contracts, financial institutions can automate “margin ratchets,” allowing interest rate adjustments to be triggered the moment a performance target is verified on-chain. This eliminates the traditional “audit lag” and prevents significant revenue leakage that often occurs from delayed incentive payouts. Furthermore, the use of decentralized oracles ensures that real-world sensor data is immutably bridged to these contracts, providing a single source of truth that near-eliminates audit disputes and manual back-office errors. Digital automation also serves as a critical enabler for scaling climate finance toward underserved segments. By reducing verification costs by an estimated 50–70%, automated systems make small-ticket sustainability-linked loans and micro-finance for SMEs commercially viable for the first time. Early adopters like BNP Paribas have already reported process efficiency gains of over 40% through pilot programs that minimize manual touchpoints in the loan lifecycle. This efficiency allows banks to lower the high “cost to serve” that previously barred smallholder project developers from participating in the carbon economy. Finally, the transition to continuous verification through IoT sensors and satellite imagery paves the way for sophisticated dynamic pricing models. Rather than

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Science-Based Target Setting Methodologies: A Finance Institution’s Framework for Evaluating Climate Ambition

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Financial institutions occupy a central role in the global transition toward a low-carbon economy. As lenders and investors, these organizations must distinguish between superficial environmental pledges and credible, science-based commitments. Evaluating climate ambition requires a robust framework to assess whether a borrower’s targets align with the Paris Agreement goals. This guide provides a comprehensive evaluation framework for financial institutions to assess target credibility. You will learn to compare different methodologies to structure performance-based financing instruments that drive real-world decarbonization. By the end of this article, you will understand how to transform raw emissions data into a strategic roadmap for climate-aligned lending. The Strategic Importance of Target Evaluation for Lenders Effective target evaluation protects financial portfolios from transition risks and greenwashing. When financial institutions accurately measure climate ambition, they unlock the ability to design sustainability-linked loans (SLLs) and other performance-linked products. These instruments reward borrowers who meet specific, science-based milestones with improved financing terms. The Climate-Mitigation Finance Framework (CMFF) serves as the technical foundation for this process. It enables banks and development finance institutions (DFIs) to verify that a project or company is technically consistent with international climate standards. Navigating the Technical Gap Small and medium-sized enterprises (SMEs) represent a significant portion of the real economy, yet they often lack the technical capacity to set rigorous targets. Financial institutions that provide clear target-setting frameworks help bridge this gap, turning “last mile” businesses into bankable climate leaders. This process begins by helping borrowers select the most appropriate methodology for their current climate maturity. Comparative Analysis: Forward-Looking vs. Backcasting Methodologies Financial institutions must understand two primary approaches to setting climate targets: the Forward-Looking methodology and the Backcasting methodology. Each serves a distinct purpose depending on the borrower’s maturity and industry. 1. Forward-Looking (Pragmatic) Methodology The Forward-Looking approach starts with the current capabilities of the business. It focuses on identifying immediately feasible mitigation activities that offer high returns on investment. A Forward-Looking allows firms to build momentum without overextending their technical or financial limits. 2. Backcasting (Science-Based) Methodology Backcasting begins with a defined end-state, such as Net-Zero by 2050. It works backward to determine the necessary interim targets required to stay within a specific carbon budget. For organizations ready to lead, backcasting provides a framework for identifying which borrowers are ready for this transformational approach. Feature Forward-Looking Backcasting (Science-Based) Starting Point Current operational capacity Future Net-Zero goal Primary Goal Operational efficiency Paris Agreement alignment Typical Term Short-term (1–5 years) Long-term (up to 2050) Risk Profile Predictable ROI Innovation-driven risk Evaluating Target Credibility: A 6-Step Framework The Climate-Mitigation Finance Framework (CMFF) integrates six components to manage and monitor climate actions effectively. Lenders should use this structured approach to verify the ambition and viability of a borrower’s climate targets. Step 1: Assess Climate Maturity Level (CML) The first component involves assessing the borrower’s readiness. The CML ranks organizations based on policies, institutional commitments, and their ability to measure emissions. This classification identifies technical capacity gaps and facilitates performance monitoring against financing goals. Step 2: Baseline Verification A target remains credible only if the baseline is accurate. Financial institutions must ensure the borrower has conducted a professional GHG inventory covering Scope 1, 2, and material Scope 3 emissions. The baseline year must represent normal business operations to avoid skewed results. Step 3: Assessment of Ambition Levels Lenders must determine if the proposed reduction rate meets international benchmarks. For science-based targets, the Absolute Contraction Method [LINK: Absolute Contraction Method: 4.2% Annual Reduction Explained] is a primary standard for alignment with a 1.5°C pathway. Step 4: Gap Analysis Identifying the ambition gap is critical for risk assessment. This involves comparing the borrower’s business-as-usual trajectory against their required science-based pathway. A thorough Gap Analysis helps determine how much additional climate finance is needed to reach the desired state. Step 5: Monitoring and Reporting Continuous assessment against established targets provides accountability throughout the financing lifecycle. Lenders should require regular reporting of climate-finance impacts and mitigation outcomes. Using specialized platforms like GREENIA optimizes an organization’s ability to report consistently. Step 6: Structuring Milestone-Based Financing Accountability is best ensured through phased commitments. Lenders should link financing terms to Interim Targets [LINK: Interim Targets vs. Long-Term Goals: Structuring Milestone-Based Financing] rather than distant goals. This involves: The Role of the Climate-Mitigation Action Plan (CMAP) A target without a funded action plan presents a significant credit risk. Financial institutions should require a Climate-Mitigation Action Plan (CMAP) that spans no more than five years. Components of a Bankable CMAP: Industry-Specific Considerations for Lenders Emissions profiles vary significantly by sector, and target evaluation must reflect these nuances. Tourism and Hospitality For hotels and resorts, targets often focus on energy efficiency and waste reduction. Mitigation opportunities include solar photovoltaic systems, high-efficiency heat pumps, and biomass energy systems using local organic waste. Manufacturing Industrial targets rely heavily on process electrification and efficiency improvements. Lenders should look for targets that address upgrading power plants, enhancing industrial processes, and integrating smart grids. Agriculture Agricultural targets incorporate both emissions reductions and carbon sequestration. Key activities include anaerobic digesters to convert manure into biogas, precision agriculture equipment, and reforestation projects. Pro-Tips for Portfolio Managers Financial institutions should encourage a hybrid approach for most clients. This involves using the Forward-Looking methodology to capture immediate “low-hanging fruit” while developing a science-based Backcasting strategy for long-term resilience. Furthermore, transparency in reporting is mandatory. Lenders should encourage the use of specialized platforms to ensure that data is consistent, comparable, and audit-ready. Conclusion Evaluating climate ambition is a fundamental requirement for modern financial institutions. By implementing a structured framework that compares pragmatic Forward-Looking targets with rigorous science-based Backcasting, lenders drive meaningful impact while mitigating risk. Setting these targets turns climate action from a compliance burden into a source of competitive advantage. As the global green transition accelerates, the institutions that master these methodologies will lead the portfolios of the future. Ready to evaluate your portfolio’s climate ambition? Contact us to start building your green portfolio today. This article was written by Matheus Mendes from the Green Initiative

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Why SMEs Still Struggle to Access Climate Finance

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From a climate perspective, we are living through a decisive moment—one in which the prioritization of the climate agenda is no longer optional. In 2024, global average temperatures surpassed 1.5°C above pre-industrial levels for the first time. Wildfires, floods, and droughts have ceased to be exceptional events and are now recurring signals of a climate transformation advancing faster than the international community has been able to respond. It is true that meaningful progress has been made toward economic decarbonization. However, this progress has not occurred at the speed or scale required. While multilateral frameworks have helped avert even more critical scenarios, the current trajectory continues to drift away from the mitigation targets necessary to stabilize the climate and reduce the systemic risks facing societies and economies worldwide. SMEs: The Missing Link in the Climate Transition In this context, small and medium-sized enterprises (SMEs) could—and should—play a far more central role in the global decarbonization agenda. SMEs account for over 90% of the global productive fabric, generate more than half of all jobs, and sustain supply chains that connect territories, sectors, and markets. Their capillary presence in cities, rural regions, and production hubs gives them a role no large corporation can replace. SMEs are the “last mile” of the climate transition—the point where national commitments translate into real economic action, and where decarbonization becomes tangible in terms of competitiveness, resilience, and long-term viability. Yet despite this central role, climate mitigation finance is not reaching SMEs at the scale or speed the climate crisis demands. A Structural Paradox in Climate Finance The paradox is clear:Climate finance exists. Commitments have multiplied. Pressure to transition toward low-carbon models continues to grow. And yet, SME participation in climate finance mechanisms remains marginal. This disconnect is not primarily due to a lack of financial resources or insufficient climate ambition. Rather, it stems from a combination of structural, technical, and operational barriers—most notably, a well-documented technical capacity gap. To access climate finance, companies must demonstrate mitigation potential in a robust and verifiable manner. This typically requires: Most SMEs simply do not have these elements in place. They lack emissions inventories, technical teams, standardized tools, and the capacity to monitor and verify impact. This mismatch between what financiers require and what SMEs can provide explains why effective demand remains low—even in the presence of abundant climate capital. The Financial Sector’s Challenge From the perspective of financial institutions, the challenge is equally significant. Without standardized, comparable, and verifiable data, it becomes difficult to assess risk, estimate mitigation returns, and structure suitable financial products. The absence of shared criteria—regarding what qualifies as a mitigation activity, how impact should be measured, or what minimum information companies must disclose—raises transaction costs and increases uncertainty. In an environment of growing regulatory pressure and transparency expectations, this gap discourages capital allocation to SMEs, despite their enormous mitigation potential. A Vicious Cycle of Exclusion The outcome is a self-reinforcing cycle: As a result, the international climate finance architecture inadvertently reproduces structural inequity. The very enterprises best positioned to deliver territorial decarbonization are those facing the greatest barriers to participation. The Opportunity We Are Missing This reality stands in stark contrast to the scale of the opportunity. SMEs can reduce emissions through: When these interventions are facilitated, supported, and scaled, their aggregate impact can significantly accelerate the transition toward resilient, low-carbon economies. Excluding SMEs does not only delay climate action—it weakens the competitiveness of key productive sectors, undermines employment, and limits alignment with international decarbonization standards that increasingly shape global trade. Why the Gap Persists—and How to Close It The central question is unavoidable: why do SMEs struggle to access climate finance? One critical answer is that current financial mechanisms were designed for companies with robust structures, specialized teams, and the capacity to comply with complex monitoring and verification standards. Until these mechanisms are adapted to the scale, realities, and dynamics of SMEs, the gap will persist. The good news is that this challenge is not irreversible. It is fundamentally a matter of strategy and opportunity. Aligning climate finance architecture with SME realities—by simplifying processes, generating reliable data, integrating technical assistance, standardizing criteria, and reducing transaction costs—is essential to unlocking their role as climate leaders. Green Initiative’s Role in Bridging the Gap In 2025, Green Initiative was recognized at the Sustainable Finance Awards as a leading organization in advancing climate-aligned financial solutions (category to be finalized). We were honored with the award for Net Zero Progression of the Year, while our own Erika Rumiche Hernández was named Rising Star Under 30 — a remarkable double recognition that underscores both our organizational impact and the leadership of the new generation. Green Initiative works globally to support financial institutions seeking to close the SME climate finance gap through: Currently, Green Initiative is collaborating with international partners on the publication of Climate Mitigation Finance: A Practical Guide for Financial Institutions & SMEs, scheduled for release in the first half of 2026. This guide aims to provide actionable frameworks that translate climate ambition into real, scalable financial access for SMEs worldwide. When financial systems evolve to meet SMEs where they are, these enterprises will not merely access climate finance—they will help lead the climate transition from the ground up, exactly where impact matters most. Ready to unlock climate finance for SMEs?Contact Green Initiative to explore how technical assistance, data transparency, and climate certification can turn ambition into bankable climate action. This article was written by Tatiana Otaviano Luiz from the Green Initiative Team. Related Reading

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Green Initiative Shines Bright with a Double Win at the Sustainable Company Awards 2025

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Green Initiative is proud to announce an extraordinary milestone at this year’s Sustainable Company Awards 2025, hosted by Environmental Finance. We were honored with the award for Net Zero Progression of the Year, while our own Erika Rumiche Hernández was named Rising Star Under 30 — a remarkable double recognition that underscores both our organizational impact and the leadership of the new generation. The Sustainable Company Awards, held annually by Environmental Finance, stand among the most prestigious recognitions in the sustainability sector. They celebrate companies, leaders, and initiatives at the forefront of corporate sustainability, recognizing those that not only make commitments but also deliver measurable results in areas such as decarbonization, sustainable finance, climate innovation, and governance. Earning this distinction is an international seal of credibility, reaffirming the tangible impact of the strategies and actions honored. Net Zero Progression of the Year This award celebrates the innovative and results-driven strategies that Green Initiative has implemented to accelerate the global journey toward net zero. From helping businesses and destinations measure and reduce their carbon footprints, to developing scalable climate-positive and nature-positive frameworks, Green Initiative has demonstrated that climate action is not only possible but can be a powerful driver of competitiveness and resilience. Our projects in tourism, corporate sustainability, and ecosystem restoration are proof that measurable climate strategies can deliver tangible results across sectors. This recognition reinforces our commitment to setting new benchmarks for climate and nature positive action worldwide. Some of the key areas that stood out in the judges’ commentary include: Rising Star Under 30: Erika Rumiche Hernández The recognition of Erika Rumiche Hernández as Rising Star Under 30 is both an honor and an inspiration. Erika has been instrumental in advancing climate finance solutions within Green Initiative, bridging technical expertise with a bold vision for inclusive climate action. Her leadership demonstrates the power of youth-led innovation in shaping a sustainable future. By combining rigorous technical knowledge with passion for impact, Erika embodies the values of the Green Initiative and the promise of the next generation of sustainability leaders. Erika’s recognition as Rising Star Under 30 goes beyond energy and enthusiasm. Here are some of the qualities and achievements that made her stand out: A Double Recognition of Impact and Vision Together, these two awards represent more than recognition — they are a validation of our mission: to empower businesses, destinations, and communities worldwide to become climate positive and nature positive. As we look toward COP30 and beyond, this double win energizes our entire team, partners, and collaborators. It reminds us that systemic change is possible when vision meets action, and when innovation is paired with integrity. Thank You 💚 We share this success with our partners, clients, and allies around the world who trust and collaborate with us on this journey. From local communities to global institutions, this achievement belongs to everyone working tirelessly for a more sustainable and regenerative future. 🌍✨ The Green Initiative is not just progressing toward net zero — we are building the foundation for a climate and nature positive world. Related reading

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Why Financial Institutions Should Measure Their Carbon Footprint?

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When discussing how to tackle climate change risks, the role of financial institutions is more important than ever. Banks, funds, and investors have the power to support the transition to a low-carbon economy. But to do that effectively, they need to start by asking a key question: What is the carbon footprint of their portfolio? Measuring the carbon emissions linked to loans and investments is one of the most pragmatic and powerful steps a financial institution can take. It’s about more than just sustainability reports or meeting regulations — it’s about knowing where they stand so they can make better decisions, reduce risks, and unlock new opportunities for financing. In this post, I’d like to explore why measuring and certifying the carbon footprint of investment portfolios matters and how the Green Initiative is helping financial institutions turn climate ambition into climate action. Let’s take a closer look, including a real example of how two financial organizations — AlphaMundi Group, a Swiss impact investment manager, and Bankamoda, a Colombian fintech for the fashion industry — are putting this into practice. Why Portfolio Emissions Matter? While a lot of money is being directed toward climate solutions (technology or nature-based), much of it isn’t reaching the businesses that need it most — especially small and medium-sized enterprises (SMEs). In Latin America and the Caribbean, for example, local commercial and development banks receive millions in mitigation finance but deploy less than 30% to the SMEs that are actually driving the transition. One major reason for this underperformance is that many financial institutions lack accurate data on the carbon emissions of the companies they engage with. That makes it difficult to identify climate risks, target high-impact investment opportunities, or access funding from climate-focused investors. The Benefits of Measuring Portfolio Emissions Here’s what happens when a financial institution starts tracking the carbon footprint of its portfolio: 1. Better Risk Management Knowing your portfolio’s carbon footprint helps you avoid investments that could become risky or obsolete in a low-carbon economy.Carbon-intensive investments carry serious financial risks due to regulatory pressure, stranded assets, and reputational damage. Knowing your emissions is the first step to managing them. 2. Easier Access to Climate Finance Funders — from multilateral banks to private investors — increasingly look for partners who can demonstrate climate impact. Financial institutions that consistently measure and report carbon emissions are better positioned to attract ESG and impact investors, and unlock opportunities such as green bonds and blended finance solutions. 3. Stronger Market Position Once financial institutions and their investees understand where carbon emissions are coming from, they can meaningfully engage in decarbonization. This insight enables the development of climate-smart financial products — such as green loans — and supports clients in reducing their own carbon footprints.The result? Financial institutions can deploy more climate mitigation finance, while companies gain competitive advantages through access to high-value, climate-linked solutions. Regulatory Change Is Coming — And So Is Opportunity With new climate-related trade regulations emerging — such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and the Deforestation-Free Products Regulation (EUDR) — understanding and managing carbon emissions will become a core competency for any organization, including financial institutions. Helping clients adapt and integrate carbon footprint management into their business models is a crucial role for financial institutions — and likely one of the most important paths to unlock new revenue streams and resource mobilization. AlphaMundi’s Commitment to Climate-Smart Investing AlphaMundi Group— under the leadership of Tim Radjy— supports businesses that generate measurable social and environmental impact across Latin America and Sub-Saharan Africa. Recognizing the intrinsic connection between poverty alleviation, social wellbeing, and climate risks, AlphaMundi is progressively integrating decarbonization metrics into its investment fund goals. These new capacities will help AlphaMundi demonstrate its leadership in carbon mitigation, as well as its ability to identify and deploy climate finance opportunities. To make this happen, AlphaMundi partnered with the Green Initiative to decarbonize its portfolio, measure client emissions, set reduction targets, and facilitate access to climate finance. Bankamoda: A Case Study in Climate and Inclusion One of the companies benefiting from this approach is Bankamoda, a Colombian fintech led by entrepreneur María del Mar Palau. Bankamoda provides financial services to micro, small, and medium-sized businesses in Colombia’s fashion industry — a sector that is both economically vital and traditionally underserved by mainstream finance. With the support of AlphaMundi and guidance from the Green Initiative, Bankamoda has: How Green Initiative Makes It Simple This is where the Green Initiative comes in. With years of experience supporting organizations worldwide, it has developed a step-by-step framework to help financial institutions integrate climate action into core operations: The Time to Act is Now For financial institutions, measuring portfolio carbon emissions is more than a technical task — it’s a strategic move. By taking action, they can lead the shift toward a climate-smart economy, reduce risks, attract new funding, and fulfill their role as key agents of change. The partnership between AlphaMundi and Bankamoda shows what’s possible when financial institutions embrace climate finance as an emerging and fast-growing opportunity with tangible benefits for long-term prosperity and competitiveness. The sooner your institution begins this journey — turning climate ambition into climate action — the greater your role in catalyzing mitigation finance and decarbonizing the economy. With the support of the Green Initiative, your institution can begin measuring the carbon emissions of its investment portfolio today — pragmatically, effectively, and with a vision for a greener future. 💡 Ready to take the next step? Reach out to Green Initiative and start building a greener, more resilient portfolio today. This article was written by Tatiana Otaviano from the Green Initiative Team. Related Articles

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Global Climate Finance Research: Share Your Expertise in Sustainable Investments

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The world is at a turning point in climate finance, where investments in climate mitigation strategies are shaping the global economy. As financial institutions, investors, and businesses align with net-zero goals, sustainable investment has never been more critical. To accelerate this transition, Green Initiative is leading a global research study on climate mitigation finance, and we invite experts like you to participate. Your insights will contribute to a peer-reviewed White Paper, providing actionable strategies for investors and financial organizations worldwide. Why Your Expertise Matters This study is conducted as part of Green Initiative’s commitment to the United Nations Principles for Responsible Investment (PRI). The findings will be included in the White Paper on Climate Mitigation Finance, a high-impact report reviewed by experts from global financial institutions, UN agencies, and sustainability organizations. 🔹 Uncover key investment trends driving climate finance.🔹 Identify challenges & opportunities in sustainable finance.🔹 Develop practical strategies to align investments with climate goals.🔹 Shape policies & financial frameworks that support net-zero transitions. With growing regulations, ESG investing, and the rise of sustainable finance, your expertise will help create innovative financial solutions that accelerate the shift to a low-carbon economy. The Role of Finance in Climate Action Financial institutions play a pivotal role in driving climate resilience and risk management. However, capital misallocation, policy uncertainties, and evolving regulatory landscapes remain challenges. By participating in this study, you will contribute to: ✔ New financial models for green investment.✔ Enhanced climate risk assessment frameworks.✔ Sustainable investment strategies that drive high-impact outcomes.✔ Global policy recommendations for climate-focused financial regulations. How to Participate Your insights will be completely confidential, and the survey takes only 15 minutes to complete. Participants will receive exclusive access to the final report, gaining early insights into emerging trends in climate finance. 🔗👉 Complete the survey here Be Part of the Global Climate Finance Movement Your voice can shape the future of sustainable investments and responsible finance. By contributing, you join a community of leading finance professionals, sustainability experts, and global investors committed to building a resilient, low-carbon economy. 📢 Join the conversation on LinkedIn! Share your thoughts using #ClimateFinanceResearch and connect with like-minded experts. For any questions, feel free to reach out. Thank you for being a catalyst for change in climate finance! This initiative is managed by Tatiana Otaviano from the Green Initiative Team.

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Green Initiative Becomes a Signatory of the Principles for Responsible Investment (PRI): A Commitment to Climate-Responsible Investments

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We are thrilled to announce that Green Initiative has officially joined the Principles for Responsible Investment (PRI) as a signatory. This important milestone reinforces our commitment to advancing climate-responsible investments worldwide and furthers our mission to drive sustainable finance that creates lasting environmental impact. What is PRI and Why is it Important? PRI is an international network of investors committed to incorporating environmental, social, and governance factors into financial decision-making. By adhering to PRI’s six key principles, signatories commit to: 1. Incorporating climate issues into investment analysis – Assessing climate risk and social impact when making investment decisions 2. Being active owners – Signatories engage in shareholder activism, advocating for sustainable corporate governance and responsible business practices. 3. Seeking appropriate disclosure on sustainability issues – Investors encourage companies to be transparent about their sustainability performance, climate impact, and corporate governance policies. 4. Promoting the acceptance and implementation of the Principles within the investment industry – Financial institutions work to advance responsible investment practices by educating stakeholders, partners, and policymakers. 5. Enhancing effectiveness by working together to implement the Principles – Collaboration among PRI signatories strengthens industry-wide efforts to develop innovative, sustainable finance solutions. 6. Reporting on progress toward implementing the Principles – Signatories provide regular sustainability reports, tracking their commitment to responsible investment and disclosing their climate impact and sustainability performance. As climate change accelerates, PRI’s role is critical in fostering sustainable investment strategies that balance financial returns with positive environmental and social impact. By implementing these six principles, investors contribute to a low-carbon economy, promote corporate transparency, and drive meaningful environmental change Green Initiative’s Role in PRI’s Commitment As a third-party verifier and advisory services provider, Green Initiative supports financial institutions, banks, and investors in achieving and maintaining their climate mitigation and nature positive investment targets. We provide independent climate and nature assessments that: Leveraging Innovation for Climate Accountability: Science based Solutions and the Climate Performance Platform Green Initiative leverages cutting-edge technology and science-based solutions to enhance climate accountability through: This AI-powered approach boosts environmental accountability while actively supporting global reforestation and ecosystem restoration efforts. By providing a data-driven approach to climate disclosure, CPP enhances corporate transparency and investor confidence in sustainable investments. Green Initiative´s Commitment to a Sustainable Future The financial sector holds immense power to drive global climate action. By joining PRI, Green Initiative plays a critical role in ensuring that investments align with climate commitments: • Ensuring impact-linked financial instruments align with climate objectives: we conduct investment due diligence, verifying that funds support sustainable energy, green infrastructure, and carbon reduction projects. • Tracking investee´s compliance with climate and nature impact goals: Through ongoing environmental performance assessments, we ensure companies meet climate and nature criteria to maintain financing agreements. • Facilitating financial term adjustments based on climate performance Financial institutions can adjust interest rates, lending terms, or investment priorities based on a investee´s progress. This process fosters trust, transparency, and accountability, ensuring that capital flows actively contribute to a low-carbon, sustainable economy. Together, we can build a future where responsible investments play a pivotal role in mitigating climate change and fostering positive outcomes for our planet. Ready to align your investments with climate action? Contact us today to explore how Green Initiative can help you achieve measurable climate mitigation impact through responsible investing. Contact us at https://greeninitiative.eco/contact/ This article was written by Tatiana Otaviano from the Green Initiative Team.

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Blended Finance for Decarbonization: De-risking Climate Mitigation Investments

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Over the past decade, blended finance has become an increasingly relevant tool for scaling development and “de-risking” social and environmentally positive markets to attract private capital. According to the Organization for Economic Co-operation and Development (OECD)1, in 2023, blended finance mechanisms catalyzed the attraction of USD 70 billion to development-linked investments. In this article, we explore what blended finance is in simple terms and how it can support the green economy through decarbonization. Very different from a carbon tax, blended finance is an entrepreneurial approach that involves public or philanthropic money in a deal’s fundraising efforts, as this extra capital can significantly help reduce risks for private investors. Philanthropic funds are extensively used to fund technical assistance efforts for example, while governments tend to have financial bandwidth and resilience in case the deal doesn’t reach the expected return in the given timeline. At the same time, private capital is a valuable component of the fundraising aspect of blended finance deals, as it can help close significant funding gaps, and allows asset managers, banks, and other types of private investors to simultaneously build their know-how in development markets and bring an innovative and fast-paced approach to sectors that were previously exclusive governmental responsibility2. According to the World Economic Forum (WEF)3 , decarbonizing the economy by 2050 will collectively cost $3.5 trillion yearly, which is equivalent to half of global corporate profits and a quarter of world taxes collected. This transition is mainly based on the decarbonization of infrastructure (including energy), which, according to The World Bank is considered high-risk by most private investors and emits 60% of all greenhouse gases yearly4. In 2024, the World Bank5 released a blog post affirming that throughout the 2013-2023 decade, the average infrastructure deal attracted 40 cents of private capital per 1$ of government or philanthropic money invested: however, the 10% most successful blended finance infrastructure deals attracted up to 2$ of private capital per 1$ in public investments. But what are the deciding factors, and how can climate mitigation projects and products be framed as highly profitable deals for private investors? PwC affirms that successfully attracting private capital to net zero infrastructure projects, requires the implementation of clear and consistent government policies that can provide the stability investors seek6 . A practical example is Australia’s recent surge in renewable energy investments. In 2024, Australia committed $9 billion to large-scale wind and solar farms, marking the highest public investment in six years and adding 4.3 GW of new renewable capacity. This significant increase aligns with federal and state policy goals aimed at generating 82% of electricity from renewable sources by 2030. The passage of the expanded capacity investment scheme, which promises 23 GW of renewable energy and 9 GW of energy storage capacity, has further bolstered investor confidence. Industry experts emphasize that such stable and supportive policies are crucial for maintaining and enhancing investor confidence in the renewable energy sector7 . By the end of 2025, with renewable generation expected to account for around 48% of the energy mix, Australia’s emissions reductions are projected to reach 75 million tonnes annually, representing a 39% decrease in electricity emissions compared to a scenario without renewable growth8. Green Initiative offers climate certifications and net-zero road mapping services to start-ups, corporations, and institutional investors, which is a form of actionable technical assistance and can be used to facilitate the decarbonization of a variety of existing and upcoming energy and infrastructure projects. With its clients, Green Initiative is determined to contribute to a net-zero economy by 2050 and strengthen the green transition for a climate-positive economy. Visit greeninitiative.eco to learn more about existing projects. [1] OECD (2025), Mobilised private finance for development [2] Network for Greening the Financial System (2024), Scaling up Blended Finance for Climate Mitigation and Adaptation in Emerging and Developing Economies [3] WEF (2022), Transitioning to the green economy will cost the world another $3.5 a year [4] The World Bank (2023), The Power of Private Capital in Sustainable Development [5] The World Bank (2024), How blended finance can reorient cautious private investors to infrastructure [6] PwC, Achieving Net-Zero Infrastructure [7] The Guardian (2025), Australia’s Investment in Large Scale Wind and Solar hits six-year Peak [8] Australia’s Clean Energy Council (2024), Emissions Reduction Delivered by Renewable Energy Related Articles

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