Aligning financial flows of the financial sector in Costa Rica with the Paris Agreement climate change goals

The proposal seeks USD 627,331 over 24 months to help Costa Rica mobilize private finance for its National Decarbonization Plan (NDP) and Nationally Determined Contribution (NDC). It focuses on creating a national sustainable finance taxonomy and implementing Task Force on Climate-related Financial Disclosures (TCFD) recommendations for the banking and insurance sectors. Key activities include establishing a Financial Advisory Group (FAG), developing a GCF Country Programme, and creating online reporting modules within the SINAMECC and SICVECA platforms. The project aims to address gaps in climate risk data and the lack of unified classification systems for green investments.

• Costa Rica's financial sector is heavily dominated by state-owned entities, with two public banks holding 35% of total financial assets and the state-owned National Insurance Institute (INS) controlling approximately 80% of the insurance market.
• The country faces significant climate-related economic risks, with 80.1% of its GDP production located in high-risk areas and an estimated annual cost from hydrometeorological events that could reach 2.5% of GDP by 2025.
• The Costa Rican banking sector currently treats climate change primarily as a corporate social responsibility issue rather than a core risk management priority, with only four institutions integrating proactive climate-related financial risk management.
• The National Decarbonization Plan (NDP) 2018-2050 targets net-zero emissions by 2050 and requires an estimated investment of USD 37 billion, with potential net benefits to the economy of USD 41 billion.
• The proposal aims to develop a national sustainable finance taxonomy to provide a 'common language' for green investments, building upon the existing 'Guidance for reporting information on climate finance in financial institutions' used by SUGEF and SICVECA.
• A framework for identifying and disclosing climate-related financial risks will be developed based on TCFD recommendations, focusing on both physical and transition risks for banks and physical risks for the insurance sector.
• The project will establish a Financial Advisory Group (FAG), chaired by the Central Bank of Costa Rica (BCCR), to serve as a strategic steering body for the development of the taxonomy and risk methodologies.
• The proposal includes the development of a GCF Country Programme to guide the pipeline of public and private investments aligned with the NDC and NDP goals.
• The project intends to integrate the new taxonomy and risk reporting tools into the existing National Climate Change Metric System (SINAMECC) and the Data, Capture, Verification, and Upload System (SICVECA) via APIs.
• The proposal is coordinated with a similar Readiness grant for Panama to create economies of scale and ensure interoperable taxonomies, avoiding sub-regional fragmentation of methodologies.

APA

Green Climate Fund (2022). Aligning financial flows of the financial sector in Costa Rica with the Paris Agreement climate change goals. https://www.greenclimate.fund/sites/default/files/document/readiness-grant-costa-rica-unep.pdf

Chicago

Green Climate Fund. Aligning financial flows of the financial sector in Costa Rica with the Paris Agreement climate change goals. 2022. https://www.greenclimate.fund/sites/default/files/document/readiness-grant-costa-rica-unep.pdf.

Wikipedia

{{cite report |author=Green Climate Fund |title=Aligning financial flows of the financial sector in Costa Rica with the Paris Agreement climate change goals |date=18 August 2022 |url=https://www.greenclimate.fund/sites/default/files/document/readiness-grant-costa-rica-unep.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greenclimatefund2022aligning, author = {{Green Climate Fund}}, title = {{Aligning financial flows of the financial sector in Costa Rica with the Paris Agreement climate change goals}}, institution = {Green Climate Fund}, year = {2022}, month = aug, url = {https://www.greenclimate.fund/sites/default/files/document/readiness-grant-costa-rica-unep.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }