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Close-up of an industrial IoT sensor attached to a tree, representing automated Digital MRV (dMRV) in a forest.

MRV Systems: Building Infrastructure for Performance-Based Climate Finance

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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A high-rise financial building transitioning into a lush green forest, overlayed with a digital globe and a rising growth chart representing science-based climate targets and sustainable finance.

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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Peruvian delegation with official banner for the World Surfing Conservation Conference 2026.

WSCC 2026: A Global Summit for Ocean Protection and Surf Culture

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In February 2026, the global surfing community and leading ocean conservationists will descend upon Australia’s Gold Coast for a landmark event: the World Surfing Conservation Conference (WSCC 2026). Hosted by the Gold Coast World Surfing Reserve (GCWSR) and Southern Cross University, this four-day inaugural event aims to unite science, culture, and sport to safeguard the world’s waves for future generations. A World-First Milestone: Olas Perú and Carbon Neutrality The conference will showcase a global-first for the surfing industry: the participation of Roberto “Muelas” Meza and his school, Olas Perú, the first surf school in the world to be Carbon Neutral Certified. As a legendary coach and eight-time national champion, Meza is leading a delegation of students to the Gold Coast to demonstrate how the next generation of “semilleros” can balance high-performance sport with rigorous environmental standards. By achieving certification through the Green Initiative and following international ISO standards, Olas Perú provides a strategic blueprint for how surf businesses can actively measure and offset their carbon footprint. History in the Making: The San Bartolo Club Arrives The Peruvian presence at the conference is further bolstered by the arrival of the San Bartolo Club from Punta Hermosa, who recently landed on the Gold Coast to make sporting history. While veteran leaders like Muelas (Roberto Meza) and Magoo de la Rosa are returning to Australian shores, the delegation includes a talented group of “groms”—Catalina, Brianna, Alejandro, and Bastian—marking their very first visit to the region. This group is set to become the first-ever South American team to compete in the World Club Championship at Snapper Rocks, a milestone that perfectly complements the conference’s mission of fostering global surfing heritage and youth leadership. A Legacy of Champions: Felipe Pomar at Kirra The momentum for the Peruvian delegation is at an all-time high following an inspiring morning at Kirra with Felipe Pomar, Peru’s first World Champion (1965). At 82 years old, Pomar continues to be a global ambassador for the “surfing for life” philosophy, recently appearing on the Today TV morning show to discuss his enduring connection to the ocean. His presence provides a legendary backdrop for the San Bartolo Club as they prepare for their historic debut at Snapper Rocks. Event Overview A Convergence of Legends and Experts The conference features a “stacked” lineup of over 100 speakers from 20 countries. Attendees will hear from icons like seven-time World Champion Layne Beachley AO, three-time Pipe Master Tom Carroll, and surfing pioneer Wayne “Rabbit” Bartholomew. Beyond the professional athletes, the stage will be shared with world-class coastal engineers, climate scientists, and representatives from global NGOs like Save The Waves Coalition, Surfrider Foundation, and Surfers for Climate. Key Themes and Highlights WSCC 2026 isn’t just an academic gathering; it’s a movement that blends rigorous research with cultural celebration. Key topics include: Immersive Experiences The event is designed to be as vibrant as the coast itself: How to Get Involved Whether you are a researcher, a student, a professional surfer, or an ocean advocate, WSCC 2026 offers a unique platform to exchange ideas and find workable solutions for the future of our coastlines. Registration is now open. Early bird rates are available, and attendees have the chance to win prizes, including surf trips to Fiji and Indonesia. Visit wscc2026.com.au to secure your spot, view the full program, or inquire about sponsorship opportunities. Join the movement to ensure that the waves we love today are still breaking for the surfers of tomorrow. This article was prepared by the Green Initiative Team. Related Reading

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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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Riding the Wave of Change: How Roberto Meza “Muelas” Is Mobilizing Peru’s Surf Industry Toward Innovative Climate- and Nature-Positive Action

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The ocean has always been Peru’s stage for surf legends. Today, it’s also becoming the frontier of climate leadership—thanks to visionaries like Roberto “Muelas” Meza, founder of Olas Perú and Global Ambassador of the World Surf Cities Network (WSCN). Earlier this month, Olas Perú officially launched its 2025–2028 Sustainability Plan at the Municipal Palace of Miraflores. The event marked a milestone not only for Peruvian surf culture but for global sustainability in sports. With this initiative, Olas Perú reaffirmed its role as the world’s first carbon-neutral surf school, setting the standard for surf communities everywhere. From Surfboards to Sustainability Boards Under the leadership of Meza and Director Silvana Pastorelli, Olas Perú’s new plan revolves around five strategic pillars: “This plan is not just a document—it’s our commitment to Peru, to the ocean, and to future generations,” said Pastorelli. “We invite everyone to paddle together toward a surf culture that inspires, regenerates, and transcends.” For Meza, sustainability isn’t an accessory—it’s the new wave that must carry the entire surf ecosystem forward. As an active voice within the WSCN, he has been instrumental in connecting surf cities like Miraflores and Cabo Blanco through shared goals of carbon neutrality, circular tourism, and climate-positive coastal management. Measuring Impact: From Commitment to Certification Olas Perú’s commitment to sustainability is backed by concrete results. In 2023, the organization conducted a rigorous carbon footprint measurement following ISO 14064-1:2018 and the Greenhouse Gas Protocol standards, covering all emission sources—from transportation to energy use and materials. These emissions were fully offset through Certified Emission Reductions (CERs) issued by the United Nations, derived from a renewable energy project in India, enabling Olas Perú to contribute to the global clean energy transition. This achievement positions Olas Perú not only as a pioneer in Latin America but as a model for surf schools worldwide, proving that sports can grow in harmony with the planet. The Power of Partnership The launch event brought together key partners and institutions shaping Peru’s green transition. Representatives from PromPerú, CANATUR, Hazla por tu Ola, LATAM Airlines, and the Municipality of Miraflores joined the discussion panel “Surf and Sustainability: Waves of Change for Peru.” Their collective message was clear: sustainability in sports thrives when public and private sectors paddle in the same direction. Olas Perú’s leadership was also recognized with the Marca Perú (Peru Brand) distinction, underscoring its role as an ambassador for responsible tourism and national pride. Miraflores and Cabo Blanco: Twin Beacons of Climate Action The Mayor of Miraflores, Carlos Canales, highlighted the district’s recognition as an official Surf City within the WSCN—thanks in large part to Olas Perú’s decades of work. Miraflores now stands beside other Peruvian coastal destinations like Cabo Blanco, which recently advanced its own sustainability agenda through the Turismo Circular Perú project, financed by AECID and the European Union and implemented with the Green Initiative. While Miraflores symbolizes the urban surf model of circular governance, Cabo Blanco represents the community-driven transformation of rural coastal tourism. Together, they embody Peru’s emerging identity as a global laboratory for climate and nature-positive development in surf cities. A Movement That Transcends the Ocean With over 33 years of history, Olas Perú continues to inspire athletes, educators, and policymakers to view surfing not only as a sport but as a vehicle for environmental restoration and social inclusion. By integrating education, circular economy principles, and ecosystem conservation into its operations, Olas Perú demonstrates how surf schools can become agents of decarbonization—turning every wave into a ripple of positive impact.Through the guidance of Roberto “Muelas” Meza and the support of partners like Green Initiative, PromPerú, and WSCN, the country is charting a new course: one where sustainability is as natural as the tide and where Peru’s surf cities ride together toward a climate-positive future. This article was written by Musye Lucen from the Green Initiative Team. Related Reading

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Industrialization of Brazil’s Comparative Advantages: How Natural Capital Can Drive Inclusive and Sustainable Growth

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How can emerging economies grow and foster development today, in a world where protectionism has become the norm, access to markets has narrowed, technology sharing has declined, and geopolitics has taken center stage? The strategies that propelled South Korea, Taiwan, China, Singapore, and others to success decades ago no longer deliver the same results. What, then, are the new pathways and opportunities? The answer lies in identifying and seizing the vast opportunities arising from climate transition, geopolitical realignment, and the quest for resilience in global value chains. These forces are revaluing geography as one of the most powerful drivers of business and investment. This is particularly true for much of Latin America, endowed with immense natural wealth and capital—renewable energy, bioeconomy resources, critical minerals, forests, carbon markets, water, and ecosystem services, among others. There are already unmistakable signs of a shift in relative prices in favor of these assets, which could reshape the global economic game and benefit emerging economies. To unlock this potential, however, countries must transform static comparative advantages into dynamic ones—in other words, industrialize their natural assets and add value to them. The moment is favorable, but the benefits are not automatic. 🎧 This is the central theme of the new podcast series launched by Imagine Brasil, “Industrialization of Brazil’s Comparative Advantages,” conducted by professors Aldemir Drummond and Jorge Arbache. In the first episode, Maria Netto, CEO of the Instituto Clima e Sociedade (iCS), offers an in-depth analysis of the global geopolitical and economic landscape, highlighting structural crises linked to energy, food, and climate change. She discusses Brazil’s challenges and opportunities in leveraging its clean energy matrix and abundant natural resources to generate innovation, added value, and long-term development. “Industrializing natural advantages is not only about economic transformation—it’s about shaping a new, inclusive model of prosperity for the twenty-first century,” emphasizes the Imagine Brasil initiative, created in collaboration with the Fundação Dom Cabral (FDC). 🔗 Listen to the first episode on Spotify: Industrialização das vantagens comparativas do Brasil – Conversa com Maria Netto (iCS) The new Imagine Brasil podcast, conducted by Jorge Arbache (Photo/ Green Initiative’s Scientific and Technical Advisory Council member) and Aldemir Drummond, explores how Brazil can transform its natural capital into engines of innovation, inclusive prosperity, and sustainable development through the industrialization of its comparative advantages.

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Climate and Competitiveness: Can SMEs Navigate the EUDR and Maintain Their Agro-Export Leadership?

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The New Era of Climate-Driven Trade The global trade landscape is undergoing a fundamental transformation where climate considerations are no longer optional—they have become essential competitive factors. Since December 30, 2024, large and medium-sized companies exporting agro-industrial products to the European Union have faced a new reality: compliance with the EU Deforestation Regulation (EUDR), which prohibits the entry of products linked to deforestation. Starting in June 2025, this requirement extends to small and medium-sized enterprises (SMEs), marking a pivotal moment where the climate agenda materializes as a concrete element of industrial competitiveness rather than merely an environmental consideration. Understanding the EUDR: A Global Response to Forest Loss The EUDR emerges from a critical global context that demands urgent action. According to the FAO, more than 420 million hectares of forests were lost worldwide between 1990 and 2020—an area larger than the entire European Union. Agricultural expansion has been the primary driver of this deforestation, with profound impacts on biodiversity, rural livelihoods, and climate stability. As one of the world’s largest consumers of agricultural and forest products, the EU has taken responsibility for limiting its external ecological footprint through this pioneering regulation, which forms a central pillar of the European Green Deal’s commitment to climate neutrality by 2050. The EUDR applies to seven critical commodities and their derivatives: palm oil, cocoa, coffee, soy, timber, beef, and rubber. This encompasses everything from chocolate and leather to furniture and paper products. To access EU markets, companies must demonstrate compliance with three fundamental requirements: Deforestation-Free Production: Products cannot originate from land deforested after December 31, 2020, with specific protections against forest degradation for timber products. Legal Compliance and Geographic Traceability: Companies must verify that production complies with all relevant laws in the country of origin, including land tenure, labor rights, and environmental regulations. Crucially, they must provide precise geographic coordinates of production sites. Comprehensive Due Diligence: Organizations must implement robust systems to assess and mitigate risks throughout their supply chains, with documentation requirements maintained for at least five years. The Latin American Challenge and Implementation Reality For Latin America and the Caribbean (LAC), the stakes are substantial. In 2022, the region exported over $157 billion to the EU, with approximately $53 billion from the agribusiness sector. More than 60% of these agro-exports—at least $32 billion—fall under EUDR regulation, meaning the majority of the region’s agricultural trade with Europe must now meet these new standards. The challenge varies significantly by product and country. Coffee exports from Colombia, Brazil, Honduras, and Peru generated $7 billion in sales, spanning from green beans to gourmet products. Cocoa from Colombia, Ecuador, Peru, and the Dominican Republic reached $2.6 billion in beans, butter, paste, and finished products. Brazil and Mexico led timber exports with $4 billion in boards, furniture, paper, and cardboard products. Following a 12-month delay granted in late 2024, the EUDR now applies from December 30, 2025, for large companies, and June 30, 2026, for micro and small enterprises. This adjustment provides crucial additional time for preparation, but the window for action is narrowing rapidly. Despite this extension, significant implementation challenges remain on the EU side, including the absence of a unified digital system for due diligence declarations and delayed country risk classifications. The EU must also better recognize existing certifications and platforms in producing countries to avoid duplicating bureaucratic processes and increasing transaction costs. Strategic Response: From Compliance to Competitive Advantage For companies to maintain their competitive position, immediate action across multiple fronts is essential. Supply chain mapping must identify all products within EUDR scope and trace them back to their geographic origins, including precise coordinates of production sites. Legal verification ensures comprehensive compliance with local laws governing land tenure, environmental management, and labor standards in all source countries. Technology integration through georeferenced traceability systems provides the detailed documentation required for due diligence processes, while systematic risk assessment approaches evaluate and mitigate deforestation and illegality risks across the entire supply chain. Strategic partnerships with technical organizations, certification bodies, and technology providers help build robust compliance systems. While certifications such as FSC, Rainforest Alliance, and UTZ can support compliance efforts, they do not replace the mandatory due diligence system required by the EUDR. Companies must build comprehensive systems that may incorporate these certifications as supporting evidence. Smart companies recognize that EUDR compliance represents more than regulatory obligation—it’s a pathway to sustainable competitive advantage. This transformation was inevitable, driven not only by the EU’s commitments under the 2015 Paris Agreement to combat climate change, but also by growing consumer demands for responsible sourcing. Regardless of the regulatory angle, deforestation-free production has long been a pending task for global supply chains. As global markets increasingly value environmental and social responsibility, early movers who invest in robust systems will differentiate themselves from competitors while accessing premium market segments. This transformation also supports broader development goals, including the formalization of agricultural systems, improved traceability infrastructure, and enhanced environmental stewardship that benefits local communities and ecosystems. Success requires coordinated action beyond individual company efforts. Governments in producing countries must strengthen legal frameworks and enforcement mechanisms while the EU must ensure fair, practical implementation that recognizes regional realities and existing capabilities. The most promising outcomes will emerge from partnerships between producing countries and the EU that build on existing strengths rather than imposing entirely new systems, creating compliance pathways that are both rigorous and achievable. An Opportunity to Accelerate Sustainable Transformation While the EUDR presents a significant challenge, it also offers an opportunity to accelerate the formalization, sustainability, and traceability of production systems. Those who prepare in advance will not only avoid commercial risks, but will also gain a competitive edge in a market that increasingly values environmental and social responsibility. At Green Initiative, we support our partners and clients in aligning with EUDR requirements through our technological and analytical tools. For instance, our geospatial analysis enables the verification of deforestation-free status by providing historical land-use evidence, helping demonstrate that no forest loss has occurred after the December 2020 cut-off date. Additionally, by

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Green Initiative Participates in the Environmental Finance Awards 2025 with Scalable Climate and Nature-Based Solutions

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Green Initiative is pleased to announce its participation in the Environmental Finance Awards 2025, a distinguished platform recognizing impactful contributions to sustainable finance, environmental leadership, and innovation in climate action. Our participation highlights two flagship initiatives that embody our mission to advance scalable, science-based solutions for a climate- and nature-positive future: These programs are examples of how measurable climate action and biodiversity protection can be effectively integrated into public policy, private sector innovation, and community engagement. Machu Picchu: A Global Benchmark in Net Zero Tourism Since 2019, under the technical guidance of Green Initiative, Machu Picchu has implemented a comprehensive decarbonization strategy that has resulted in an 18.77% reduction in greenhouse gas emissions, positioning it as the first UNESCO Designated Site to be certified carbon neutral. The strategy includes: This project has catalyzed peer learning and policy alignment throughout Peru’s Sacred Valley and globally, with structured collaborations now underway between Machu Picchu and sites such as Angkor Wat, Taj Mahal, and Cristo Redentor. 🡒 Learn more: Machu Picchu Net Zero Strategy and Climate Talks Forest Friends: Advancing Nature-Positive Action through Verified Ecosystem Restoration Forest Friends is Green Initiative’s market-based nature restoration program, developed to enable companies and individuals to make measurable contributions to biodiversity recovery and carbon sequestration. The program has already supported the planting of over 13,000 native trees across more than 200 hectares in priority conservation areas such as the Amazon, Tropical Andes, and Costa Rica’s Osa Peninsula. Key components include: Forest Friends is aligned with the UN Decade on Ecosystem Restoration and follows the UN’s Ten Principles for Ecological Restoration (2021–2030), providing a replicable model for corporate engagement in nature-positive development. 🡒 Explore the program: https://forestfriends.eco Building Global Momentum for Climate and Nature Leadership By participating in the Environmental Finance Awards 2025, Green Initiative is proud to join a community of forward-thinking organizations committed to reshaping how the global economy responds to the climate and biodiversity crises. While we are not nominated for an award, our participation underscores the urgency of sharing replicable models that combine policy innovation, scientific integrity, and measurable outcomes. Through initiatives like Machu Picchu and Forest Friends, we aim to demonstrate that climate and nature-positive transitions are more than possible: they are essential for long-term resilience, equity, and competitiveness. We remain committed to supporting governments, companies, and civil society in implementing integrated solutions that respond to the challenges of our time with clarity, transparency, and impact. 🡒 Learn more about our work: https://greeninitiative.eco This article was written by Tatiana Otaviano from the Green Initiative Team. Related Articles

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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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MAPFRE Peru Launches the Campaign “Sowing a More Sustainable Future” and Reaffirms Its Commitment to Ecological Restoration in the Amazon

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As part of its commitment to sustainability and climate action, MAPFRE Peru has launched the campaign “Sowing a More Sustainable Future”, an initiative that highlights its active role in restoring Amazonian ecosystems and its participation as a co-sponsor of the animated film Milagros: An Extraordinary Bear, the first film in the world to receive the international Climate Positive certification from Green Initiative. This campaign includes the release of a touching video that documents the experience of the MAPFRE Peru team during their visit to Madre de Dios – Tambopata, where they witnessed the tangible impact of the ecological restoration efforts they helped support. During this immersion, they gained insight into the scientific practices behind effective restoration, the challenges facing the Amazon, and the importance of protecting one of the most biodiverse ecosystems on the planet. This journey allowed the MAPFRE Peru team members to deepen their understanding of the urgency of caring for our ecosystems and the role we can all play in ensuring a better future. The restoration project, managed by Forest Friends and implemented by the Inkaterra Association, aims to recover an area of forest degraded by agricultural practices. Thanks to the support of MAPFRE and other companies, over 1,000 trees of species with high ecological, nutritional, medicinal, and commercial value have already been planted—promoting not only forest regeneration but also the well-being of local communities. MAPFRE Peru played an essential role in the Climate Positive certification process of the film Milagros, co-sponsoring the planting of native trees as part of the ecological restoration component of the certification. This action reinforces its view that climate change demands concrete and multi-sectoral responses and shows that sectors such as entertainment can also lead by example in sustainability efforts. With this campaign, MAPFRE Peru becomes a benchmark and reaffirms its commitment to biodiversity conservation and restoration, as well as to sustainable development in the country—inspiring more companies and individuals to be part of the change. Ecological restoration is possible, measurable, and necessary. This article was written by Marc Tristant from the Green Initiative Team. Related Articles

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