Network of Regulators for Sustainable Development (REDES)

Sustainable finance can be broadly understood as financing, and institutional and market arrangements to the achievement of strong, sustainable, balanced and inclusive growth. The Sustainable Development Goals (SDGs) are usually used as a framework to determine it.

A proper framework for sustainable finance development may also improve the stability and efficiency of the financial markets by adequately addressing risks as well as market failures such as externalities. Read More

Intersectoral Dialogue

Including regional workshops and other initiatives to create awareness and identifying the main challenges regarding ESG and climate risks within the financial sector.

Technical Support

To the beneficiary institutions providing insights, criteria, recommendations, and best practices on public policies aimed to address and mitigate ESG risks and its impact on the financial system, as well as to foster sustainable finance.

Training and Capacity Building

Workshops and other activities to create awareness and understanding of ESG issues and develop sustainability-related analytical capabilities.

Technical Studies

Including frontier knowledge and understanding of the current worldwide initiatives and analysis for identification of best practices on ESG risks and policies, reorganization, or applicability of technologies, among others.

Where it is implemented

REDES will support LAC central banks, financial regulators, supervisors, and any other governmental agencies in two areas. First, strengthening institutional capacity, and, second, disseminating and sharing knowledge with the overall objective of promoting the development of country-level strategies for a sustainable finance market, regulatory, and supervisory practices.

Project Map

Click icon to locate all active initiatives in the region.

Why Sustainable Regulation?

The financial sector increasingly acknowledges environmental and social as significant risk factors. ESG risks can hurt the performance of financial corporations due to exposures on credit, legal, market, operational and reputational risks. Sustainable growth requires public policy frameworks and sustainable regulations, and supervision, conducive to providing certainty for investors and industry. This also means innovative financial instruments and tools to support financial risks assessment stemming from this new landscape.

Sustainable regulation allows overcoming barriers to sustainable finance:

Improving the awareness and knowledge of regulators and financial supervisors to understand, assess, monitor, and supervise ESG and climate risks within the financial sector.

Enhancing sustainability-related analytical capabilities for financial authorities.

Incorporating ESG and climate-related risks into financial risk assessment, regulation, and supervision.

Creating transparency and a long term mindset within the financial sector regarding ESG issues.

Aligning public policies and financial regulations to a long-term strategy to promote and mobilize mainstream sustainable finance.

Partners on the Ground

This Initiative is being promoted by the IDB with support from the Association of Banking Supervisors of the Americas ASBA and the Network of Central Banks and Financial Supervisors for Greening the Financial System, NGFS.