Sustainability Report 2022

A warm welcome to IDB Invest's first Sustainability Report. It marks an important milestone in our organization's development, and we are excited to invite all our stakeholders to see how central sustainability is to our purpose, values, and work. Throughout, we have included examples that demonstrate the positive impact we are having across our region.

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We developed the report in accordance with the 2016 Global Reporting Initiative (GRI) standards. See the GRI Index. Unless otherwise noted, data refers to calendar year 2022, and dollar amounts are in U.S. dollars.

Investing in Sustainability

At IDB Invest, our mission is to use capital to support sustainable development in our region. We believe we are most effective at generating impact when we play an active role as an intermediary in financial markets.

Our expertise is in putting together the right projects with the right investors to suit different time horizons, sector priorities, appetites for risk, and expectations of returns. We provide several financial solutions such as loans, bonds, and credit guarantees while working with a range of organizations across the financial sector.

Our Impact, 2016 - 2022:

Policies and Processes

Wind mills

To allocate our resources to operations with the highest potential for development impact, we use robust and defined processes and frameworks that help us measure and monitor impact, risks, and compliance.

We also advise our clients to help them deliver the greatest impact.

Find out more:

Impact Management Framework

Sustainability at IDB Invest

Corporate Governance

Information for Investors

Our Sustainability Goals

To maintain our focus on development impact, we promote, target, and strategically select our
operations. Our main sustainability-related corporate goals for 2022 include:

Key Highlights

Case Studies

Integrating climate risk management into microfinance in Guatemala

Fundación Génesis Empresarial is renowned for its work in responsible financial inclusion, helping generate social impact through its financial products. The foundation covers 22 states in Guatemala – a country highly vulnerable to climate change – and reaches over 240,000 clients, of which 85% are in rural areas and 76% are women.

Using its own robust methodology and expertise of the region and agricultural sector, Génesis Empresarial identifies farmers’ specific financial needs, the opportunities to improve their living conditions, and the measures needed to reduce agricultural losses due to climate change.

Together with IDB Invest, Génesis Empresarial has further strengthened its approach by implementing a climate risk management system to pinpoint the risks small producers face and offer specific solutions and technical support to build resilience. For instance, the system estimates climate vulnerability, crop sensitivity in specific locations, and the producer’s adaptability. The system is integrated with the credit assessment process to better manage overall portfolio risk, and enables permanent monitoring and updating of climate risks.

IDB Invest provided a loan equivalent to $20 million to Fundación Génesis Empresarial to support increased access to financing for the country’s MSMEs. As of 2022, more than 17,000 agricultural microentrepreneurs have been supported through this partnership. Farmers have been able to sell their products within food industry value chains, generating continued income for their families and moving forward on their development path away from poverty.

Developing the cacay nut industry in Colombia

Grupo Kahai is the first company in the world to grow, process, and distribute the cacay nut, produced by a tree native to the Amazon region in the Colombian Orinoquía. Rich in protein and minerals, these highly nutritious nuts are consumed or processed into flour and oil for use in the food and cosmetics industries.

Grupo Kahai’s mission is to establish cacay as a source of sustainable economic development for Colombia through Agrocacay, S.A.S. (Agrocacay). IDB Invest provided a loan with blended finance resources from the Global Environment Facility (GEF) Climate-Smart Agriculture Fund of up to $3.1 million to Agrocacay to plant and maintain more than 100,000 cacay trees.

As of 2022, the project has reforested 250 hectares of land (over halfway to the 415 hectares expected by project end). This brings the total of land reforested under Kahai’s management to 650 hectares, on target with expectations. In addition, the replanting will promote adaptation and climate change mitigation through the recovery of degraded land with a native tree. The expectation is that 62,250 tons of CO2e will be captured during the life of the plantations. Small farmers also stand to gain through improved incomes thanks to their inclusion in the budding cacay market.

In 2021, Kahai purchased seven tons of nuts (equivalent to 70 tons of fresh fruit, a 14% increase from the previous year) from small farmers and sold over 13,000 trees to farmers to integrate them into the supply chain.

IDB Invest also supported Agrocacay with an analysis of E&S risks, as well as the design of an action plan focused on implementation of a robust E&S management system, labor and working practices, and the adoption of pollution prevention and biodiversity protection measures that will be monitored throughout the project.

This family business is also implementing improvements to its governance as part of this project, including strengthening the structure and operation of its Board of Directors, creating a succession plan for key people, and strengthening its control environment. Grupo Kahai won an Environmental Finance 2021 IMPACT Award and was the runner-up for the 2022 Emprender.

Promoting the recovery of nature-based tourism in Latin America

Explora is a sustainable tourism exploration and hospitality company based in Chile. Founded in 1993, the company is a certified B-Corporation with seven lodges in remote and iconic locations in Chile, Argentina, Peru, and Bolivia. It is a pioneer of the ecotourism concept and embraces the commitment to preserve and conserve nature and ecosystems.

In June 2022, we extended a $23 million corporate loan to support the company’s growth and recovery from COVID-19, as well as to finance the development of a nature reserve in Torres del Paine, Chile. Delivered under an innovative conservation model, the funds will help reactivate Explora’s tourism operations, while promoting employment and strengthening links with international markets and local suppliers.

The project, delivered in partnership with The Nature Conservancy, exemplifies a financially self-sustainable conservation model that catalyzes climate action and the protection of biodiversity and ecosystem services.

The conservation of over 6,000 hectares in Torres del Paine will be made possible through the development of a privately owned reserve that will be open to the public, and whose land and infrastructure costs, as well as the operational expenses, will be covered by an endowment from the sale of shares.

In addition, the land will be legally protected under a Chilean law conservation agreement (Derecho Real de Conservación), so that it can be conserved in perpetuity.

Integrating women-led SMEs into the textile supply chain in Honduras

Elcatex and San Juan Textiles, subsidiaries of Grupo Elcatex, are pioneers and leaders in the textile industry in Honduras. They are also pioneers in terms of building inclusive value chains that integrate women-led/owned SMEs as suppliers.

As part of the $96 million financing package, we provided advisory services to support increased purchasing from small businesses, especially those led or owned by women.

This included building awareness about the business benefits of gender-inclusive supply chains, securing management buy-in, and training procurement teams on inclusive sourcing.

This was coupled with performance-based financial incentives and concessional blended finance resources from the We-Fi initiative – a global alliance to support the growth of companies owned or led by women.

These incentives reward the client for increasing purchases from women-led/owned SME suppliers. As a result, between 2020 and 2022, Elcatex more than doubled the number of women-led businesses in its value chains, increasing from 21 to 53.

Learn more about this project in this Client Impact DEBrief.

Inspiring Change

Sustainability Week 2022

With the global economy facing extraordinary ESG challenges, sharing knowledge and convening colleagues across countries and industries feels more important than ever. Our Sustainability Week (SW) aims to do just that.

Since its launch in 1999, SW has become the major environmental, social sustainability, and corporate governance knowledge platform for the private sector in LAC.