Greening finance in Argentina to combat climate change and promote inclusion

• The agro-industrial sector in Argentina represents ca. 6.8% of the country’ GDP and generates ca. 65% of total export revenues (2020)
• The sector is responsible for ca. 37% of national GHG emissions and is one of the main drivers for deforestation
• Argentina’s economy depends largely on SMEs, constituting ca. 99% of all registered firms and 70% of formal employment. However, these often lack incentives for investing in green and sustainable solutions. More so, the COVID-19 pandemic exacerbated the finance gap
• Women are significantly underrepresented in high level roles and face barriers in accessing finance
• According to the Enterprise Survey (2017), only 8% of Argentinian companies are led by women, compared to 21.4% in Latin America and 18% worldwide
  
• Only 20.5% of women-led companies have accessed a loan, compared to 42.9% men-led companies – this gap is even bigger for SMEs and rural women

The project aimed to promote a framework that uses inclusive green finance (IGF) policy to support climate change adaptation and mitigation, with a focus on policies which can catalyse financial services from the private sector or use financial infrastructure to deploy finance for climate action. At the same time, IGF policies target low-income groups and MSMEs to mitigate and build resilience against climate change impacts. 

The project set out multiple transformative processes across its key counterparts and broader stakeholders in the financial and agro-industrial sectors in Argentina, leading to: 

• Enhanced capacity of financial actors through 5 training courses focused on sustainable finance, climate risks, TCFD (Task Force on Climate-Related Financial Disclosures), ESG, and carbon pricing
• Increased knowledge of financial actors through products and tools that can support them in making more informed decisions on investments, climate risks and opportunities in the agro-industrial sector in Argentina
• Recommendations to investors, SMEs, and the agro-industrial sector as a whole in the form of actionable roadmaps setting out a path to support the transition to a net-zero economy
• New stakeholder networks, such as three committees established to facilitate coordination among key stakeholders, enabling them to take ownership over the implementation of the recommendations and realise interventions that support greener and more inclusive financial systems and value chains

The project was so well received by its counterparts that the initial programme of activities was expanded beyond the original scope to  respond to a direct request for additional support from key counterparts such as the Córdoba Cereals Exchange and the Ministry of Economy.

GESI (Gender Equality and Social Inclusion), concepts and outcomes were fully integrated throughout activities, including training course materials to encourage mainstreaming capacity among stakeholders from the financial sector in Argentina and Latin America.  

The climate risks report highlighted how certain groups are more vulnerable to economic shocks, such as small producers of wool and fibre due to owning small land areas. As the report was developed, the team sought to engage with NGOs working with women in agriculture, small producers, indigenous groups and other vulnerable groups.  

Ultimately, the project prepared a roadmap for greener agricultural commodities that includes a set of actions to safeguard social inclusion and to promote gender equality in the sector. The team engaged with the Network of Rural Women in Argentina and other stakeholders over this process. The actions included:  

• Developing a study to understand the status of rural women including opportunities and challenges for land tenure, salaries, empowerment and credit access
• Reviewing existing processes and regulations to safeguard gender equality and equal opportunities for professional growth in public institutions
• Assessing potential interventions to empower women and other minorities
• Developing a capacity building programme for women in agriculture
• Implementing regulations to guarantee equal access to senior management roles for women 

While the full project’s impact will be realised in the medium and long term, the project kickstarted early discussions among key stakeholders in Argentina on carbon pricing, climate disclosure as well as GESI gaps. 

It is expected that the capacity, networks, knowledge, and recommendations will continue to contribute accelerating the move to net zero in the long term, thanks to the strong engagement with the project counterparts which helped develop tailored outputs that responded to their priorities.  

The sustainability of the changes set forth by the project is conditional on the implementation of recommended actions and the continuous support from relevant stakeholders. To ensure this, the project committees were created to be responsible for further implementation of project recommendations.