By: Staff Writer
November 21, 2025
The United Nations Environment Programme (UNEP) in a new report on the heels of the ongoing COP30 in Brazil, noted that The financial sector plays a crucial role as a catalyst for a smooth transition to climate friendly policies.
The report, “A just transition for Latin America and the Caribbean: New guidance for banks and insurers launched at COP30,” noted: “By mobilizing capital for sustainable solutions, transforming businesses, and supporting affected communities, banks and insurers can drive a fairer, more inclusive, and more sustainable economy.
“Integrating climate and social objectives is not an additional option, but a necessary condition for a truly transformative transition.”
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.
The report also said: “The strategies and approaches that banks and insurers can adopt to contribute to a just transition can be summarized in the following key recommendations: Commit to the just transition. Identify what the just transition means for the financial institution, considering the local realities in which it operates, the sectors of the real economy it engages with, and the people potentially affected by its operations. Integrate the results of this assessment into the institutional strategy and commit to its implementation.
“Put people at the center of the transition. Engage and consult relevant stakeholders, especially those most affected by climate actions, leveraging their knowledge and perspectives to strengthen institutional strategies and design financial solutions tailored to their realities. Furthermore, social dialogue between governments, employers, and workers should be promoted as a fundamental pillar to ensure participatory and legitimate processes.
“Adopt a holistic and flexible approach. Ensure coherent integration of climate, social, and human rights dimensions into institutional strategies. Each entity may start this process through different routes: by incorporating social aspects into climate actions, or by integrating climate goals into inclusion and inequality reduction strategies.
Develop products aligned with the just transition. Create financial solutions that contribute to climate action while promoting decent work, entrepreneurship, inclusion and financial health.
“This includes products that support small business adaptation, investment in green technologies, and inclusion promotion.
“In LAC, a region highly vulnerable to climate change, it is essential to finance adaptation actions and close the insurance gap to strengthen the resilience of groups in vulnerable situations and historically excluded such as women, youth, Indigenous Peoples, and small enterprises. Sectors such as Agriculture, Forestry, and Other Land Use (AFOLU) are priorities due to their exposure, role in food security, and importance for rural employment and economic stability.”
The report also identified strengthening internal and monitoring mechanisms, fostering behavior changes through client engagement, engaging in strategic partnerships and promoting Indigenous Peoples’ participation in the transition and ensure respect for their rights.