The transition to a sustainable economy is urgent, but it must be fair to all. This is especially true for Latin America and the Caribbean (LAC): one of the most climate-vulnerable regions, the most unequal in socioeconomic terms, and among the richest in biodiversity. Without a just approach to climate action, an estimated 2.4 to 5.8 million more people in the region could fall into extreme poverty by 2030 [1].
Adopting a just transition approach can not only support communities but also strengthens risk management and opens new markets to create long-term value for both businesses and society. UNEP FI’s latest report, released today at COP30 in Belém, Brazil provides practical guidance on how banks and insurers operating in LAC can adopt a holistic and coherent approach that integrates climate, social, and human rights dimensions across their institution’s strategies, governance, internal operations, and product and service development. It includes input from 16 LAC-based UNEP FI member institutions and 17 advisory institutions including academia, multilateral development banks and civil society organizations.
A just transition – which takes a fair and inclusive approach to the transition to low-carbon economies – enables financial institutions to strengthen risk management related to the triple planetary crisis of climate change, biodiversity loss, and pollution, alongside growing social inequality. At the same time, it presents an opportunity for value creation by opening new markets, mobilizing capital toward sustainable outcomes, and supporting communities. For example, achieving net-zero emissions by 2050 could generate US$2.7 trillion in savings across the LAC region alone [2], underscoring that a just transition is not only essential but is also an opportunity for sustainable development and inclusive growth.
Examples of just transition approaches include developing financial solutions that advance climate action while promoting social goals, strengthening mechanisms to prevent and mitigate negative social impacts from the transition, and engaging key local stakeholders. Indigenous Peoples are essential partners in this process: they represent nearly 10% of the region’s population and sustainably manage large areas of forested land, yet they receive less than 1% of direct climate finance [3].
Developed in Spanish, this report reflects the realities and needs of institutions across the region. It highlights the regional context and showcases real-world examples of some of the financial instruments that members are using to benefit their businesses and the communities they serve.
Download the report in Spanish here.
Download the executive summary in English or Portuguese.
Read more about UNEP FI’s work on Just Transition here.
[1] Banco Mundial, “Acción climática en América Latina y el Caribe — Panorama general”
[2] Blackman, A., Cavallo, E. A., Hoffmann, B. y Vogt-Schilb, A. (2024). Peligro y promesa: enfrentar el cambio climático en América Latina y el Caribe. Resumen ejecutivo. Banco Interamericano de Desarrollo (BID).
[3] Rainforest Foundation Norway. Falling short: Donor funding for Indigenous Peoples and local communities to secure tenure rights and manage forests in tropical countries (2011–2020). 2021.