Panama recently launched the "Aligning the financial flows of Panama's financial sector with the climate change objectives of the Paris Agreement" project. The project aims to develop and implement a sustainable finance taxonomy in the private financial sector.
Under this initiative, a framework will be developed to map, quantify, and disclose climate-related financial risks. The same methodologies and tools will also be implemented in the portfolios of banking and insurance institutions to assess their exposure to these risks and define strategies for their management. In this manner, the Panamanian financial sector will create the guiding structure for mobilizing private capital toward a low-emission and climate-resilient economy.
By adding a significant private investment component, Panama's sustainable finance taxonomy will aim to guide private investment toward the economic activities necessary to achieve climate neutrality by 2050. Panama's authorities will develop the taxonomy to provide standardized, science-based, internationally harmonized criteria for investments and economic activities being considered environmentally sustainable.
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