Climate Bonds Initiative (CBI), supported by the Inter-American Development Bank Group (IDB), published the third edition of its sustainable debt market report for Latin America and the Caribbean (LAC). The document includes an overview of key policy developments, trends, guidance, and growth opportunities for sustainable finance in LAC for year 2022. By the end of 2022, CBI had recorded green, social, sustainability, sustainability-linked, and transition (GSS+) debt originating from LAC region with a cumulative total of 154 billion dollars.

Despite a contraction in volumes in 2022 (-35% YoY to 40.8 billion dollars), the LAC GSS+ segment maintained its 5% share of global debt capital markets, and accounted for 25% of the total debt market in the region. The sustainability label accounted for 51% of the 2022 LAC GSS+ market, followed by sustainability-linked (SLB) label (23%), green label (13%), social label (12%). Mexico was the largest LAC GSS+ country issuer in 2022 with almost 14 billion dollars, followed by Chile (approximately 9 billion dollars) and Brazil (7 billion dollars).

The Chilean Government pioneered the sovereign SLB label in early 2022 with its debut 2-billion-dollar deal. Sovereigns have contributed to the development and promotion of the GSS+ market with supportive policies, regulation, and the establishment of local taxonomies to increase guidance for the market. Colombia (2022) and Mexico (2023) have already published their taxonomies, while Chile, the Dominican Republic, Brazil, and Uruguay have signalled the development of their own frameworks.

CBI has identified five recommendations to strengthen and extend the LAC GSS+ debt market focusing on definitions and criteria, supportive policy development, innovative instruments (like SLB and transition bonds), transparency through enhanced disclosure, and collaboration.