Aware of the environmental and social challenges facing their financial systems, financial and banking supervisors from Central America, the Dominican Republic, and Colombia launched the Sustainable Finance for Development (FISDE), initiative which promotes the integration of environmental, social and governance (ESG) criteria into financial regulation and supervision.
The project received technical and financial support from the International Finance Corporation (IFC, part of the World Bank Group), the Netherlands Development Bank (FMO), and the Norwegian Investment Fund for Developing Countries (Norfund).
FISDE’s technical and transformative approach addresses concrete risks, such as the fact that a significant portion of banking portfolios may be exposed to extreme climate events.
This reality, coupled with structural gaps in supervision and resources, prompted the development of regional methodologies and tools with support from consultants such as INCAE Business School and TECDEA.
Led by the Central American Council of Superintendents of Banks, Insurance, and Other Financial Institutions (CCSBSO), the project focuses on strengthening the resilience of the regional financial system through tools adapted to this context to integrate ESG criteria into regulation, supervision, and financial management.
“Sustainability is no longer optional for financial supervisors or the banking sector. FISDE represents a firm step toward a more prepared, resilient region aligned with international standards—without losing sight of local realities,” said Alejandro Fernández W., President of the CCSBSO and Superintendent of Banks of the Dominican Republic.
The project’s methodologies and tools were developed in conjunction with INCAE Business School and TECDEA.
FISDE is organized around three key work areas: A regional green finance taxonomy, to classify activities and investments that have a positive environmental impact; ESG criteria, to guide regulators, supervisors, and financial institutions in assessing environmental, social, and governance risks, and climate and social risk management, aimed at strengthening banks’ capacity to anticipate impacts and maintain financial stability.
This information was presented at the event “Sustainable Finance for Development: From Strategy to Action”, held in La Romana, Dominican Republic, with financial authorities and banking leaders from the region in attendance.
“At the IFC, we work to help emerging markets build stronger and more sustainable financial systems. FISDE is a clear example of how regional cooperation can yield practical, scalable solutions,” stated Ronke-Amoni Ogunsulire, Regional Manager for the Caribbean at IFC.
FISDE represents a process of integrating sustainable finance best practices by the CCSBSO member superintendencies—from Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Dominican Republic, to Colombia. Through a series of pilot exercises implemented in selected banks, exposures to climate and social risks have been identified, and national roadmaps have been developed to advance the supervision of these risks in line with international standards.
“The impact of climate change demands new ways of thinking about banking. We are proud to support an initiative that builds local capacities and creates real conditions for responsible finance,” said Juan José Dada, Director of the Financial Institutions Department at FMO.
One of the most valued aspects by participants was FISDE’s interoperable and gradual approach, which allows tools to be tailored according to each country’s progress and priorities. Beyond the technical component, the initiative has also promoted supervisor training through partnerships with academic and multilateral institutions, strengthening long-term capacity.
“FISDE builds viable pathways from each country’s context, without imposing a one-size-fits-all model. Its design reflects our commitment to a sustainable, resilient, and equitable transition for each nation,” added Federico Fernández, Regional Director for Latin America at Norfund.
The vision behind the Sustainable Finance for Development Initiative (FISDE) is to strengthen financial stability and advance toward a more robust, reliable system aligned with global sustainable development commitments.
