Grupo Promerica Net-Zero Banking Alliance (NZBA) Target Setting

Our mission with the two banks of Grupo Promerica included several steps to ensure complete portfolio carbon performance assessment, and target setting.

1. Scoping: Identification of asset classes with operational efficiency

At portfolio, asset class, sector, issuers and asset level, we conducted a climate performance analysis of the two entities, including the following asset classes:

• Corporate financial assets: Listed and unlisted equity bonds and business loans
• Sovereign financial assets: Bonds
• Project finance (eg. Renewable electricity generation)
• Real assets: real estate (Commercial and residential)
• Consumer loans: vehicle loans

Thanks to the engagement of internal stakeholders, we managed to collect these data and calculate the associated carbon footprint.

2. Carbon footprinting: Management of carbon exposure

For each asset’s classes, our experts were able to determine their carbon exposure using the relevant carbon footprinting methodology. Our method is aligned with the latest regulatory reporting frameworks and standards developed by sectorial initiatives globally. The most relevant voluntary reporting frameworks for the financial sector include the TCFD recommendations, PRI Climate reporting, CDP Climate Change, Science-Based Targets, the GHG Protocol and PCAF methodologies (used for scope 3 category 15 – Investments).

Having a robust carbon footprinting methodology serves as a basis for (i) identification of best practices, (ii) establishment of common rules for climate accountancy at the financial instruments and portfolio levels, (iii) improvement of reported and estimated data at issuers’ level; (iv) better disclosure carbon footprint at portfolio level.

At that point, our goal was to enhance climate-aligned capital allocation and to operationalise target setting.

3. Target setting: NZBA compliance

Regarding the geographic perimeter, our climate finance experts selected the most ambitious and relevant scenarios (in this case, the Net-Zero Emissions scenario from the IEA and the NGFS).

Based on the NZBA sectoral classification of carbon-intensive sectors and the methodological availability, we were able to define reduction trajectories for the following sectors: Real Estate (distinctively residential and commercial real estate), Power generation and Transport.

In addition, we prepared all materials for the Board and provided support for the official submission to the NZBA.

4. Definition of a tailored action plan

In parallel to our carbon footprint analysis, our team organized awareness workshops for Banco Promerica and Banpro employees on climate issues, carbon offsetting and NZBA

Along with internal stakeholders, we defined a carbon roadmap associated with a clear action plan by asset class and for both Grupo Promerica’s entities. For instance, workshops were dedicated to vehicle loans, real estate loans and data quality improvement for both Banco Promerica and Banpro.

Sector-specific methodologies dedicated to the finance sector are developed each year and our approach is based on the most up-to-date and rigorous frameworks. However, some asset classes would benefit from the development of a carbon accounting framework and a more rigorous collection process, such as the Agriculture sector with the FLAG methodology from the SBTi.