The sustainable finance market in Ecuador is recent. The first green bond was issued in December 2019 by Banco Pichincha, the largest bank in the country [1]. The USD 150m deal will finance renewable energy, low-carbon buildings, low carbon transportation, waste, and industry. The International Finance Corporation, the Inter-American Development Bank Invest, and Proparco (French development agency) invest with USD50m each [2]. The Bank’s 2020 Annual Report and Sustainability Report, published in May 2021, outlined the results of the project that include avoiding 7.2 thousand tons of CO2, and developing 20.515MWh of energy. Moreover, 271,5 thousand m3 of water was saved [3].


The COVID-19 pandemic caused severe damage in Ecuador. Consequently, the International Monetary Fund, approved in 2021, will economically support sustainable projects in Ecuador to generate sustainable growth with high-quality jobs for its economic recovery [4].


Key policies and governance approach

In 2016, Ecuador signed the National Protocol for sustainable finances to promote and facilitate the implementation of sustainable socioeconomic and environmental policies leading to open investment and new financing opportunities [5]. The protocol includes strategies to get investment from national and international banks, analysis of credit risks, and sustainable environmental consumption. The first Green Bonds in Ecuador were issued in December 2019- the Ecuadorian bank issued the first Social Bonds in the region. The protocol was ratified in 2021 by 15 banks [6]


Successes and remaining challenges

One of the main successes in Ecuador is the union between UNDP through the Biodiversity Finance Initiative and the Sustainable Finance Protocol, led by the Ecuadorian Association of Private Banks (ASOBANCA). The Protocol was voluntarily signed by 13 banks from ASOBANCA. In this context, UNDP, as an environmental authority, promotes biodiversity conservation as a strategy and reinforces a co-design of a model based on environmental and social sustainability. More than 40 representatives of the industrial and banking sectors identified green financial and sustainable finance opportunities. They analyzed new possibilities of green credit that need improvement to achieve the national goals for reducing GHG emissions and ecosystem conservation [7].

Another successful example of sustainable finance in Ecuador is related to the REDD+ Action Plan, which includes a combination of public resources and international funding. The national forest monitoring system supports Ecuador’s REDD+ Action Plan. Additionally, to ensure sustainable and effective implementation of REDD+ projects, it includes stakeholder engagement, which considers specific actions to strengthen capacities and knowledge [8]. Moreover, in 2020, the Ministry of Environment and Water launched the REDD+ Results-Based Payments Project, committed to promoting sustainable production and encouraging the restoration of deforested and degraded areas taking into account stakeholders from civil society, academia, the private sector, Indigenous Peoples, and NGOs [9].


Initiatives and Development Plans

In 2017, Ecuador published its National Development Plan, which includes guidelines for cohesion with environmental sustainability, risk management, and development [10]. Moreover, the country recently established the Creation Plan of Opportunities 2021-2025. Such a plan is the highest political and administrative guideline for designing public policy. The Plan establishes that Ecuador's priorities should be following the 2021-2025 Government Plan and the 2030 Agenda for Sustainable Development. Each policy refers to the priorities and their associated goals [11]. Ecuadorian approach includes the international Agenda and its commitment to fulfil the NDC but based on its national legislation, the country seeks to achieve its national targets through an alternative ethical paradigm that includes the rights of nature.


Goals and Ambitions

The first step to fulfil the Principles of Responsible Banking is to analyze their portfolios and to identify the sectors they are financing to assess the activities to achieve an economy with zero carbon emissions. During 2021 and 2022, two Ecuadorian banks joined the Banking Alliance for Net Zero Emissions, whose goal is that carbon emissions derived from credit and investment portfolios of financial institutions reach net zero emissions by 2050 [6].

The Banking Alliance for Net Zero Emissions, established in October 2022, integrates more than 491 global financial institutions, including Ecuadorian banks. To achieve their goal, banks must provide financing to develop renewable energy projects, energy efficiency, and climate-smart agricultural investments, among others, to ensure businesses transition to low-carbon models [6].

  • Ecuador has an initiative that allows the articulation between the Sustainable Finance Working Group and the Ministry of Water and Environment. The initiative offers opportunities to establish measures and actions to fulfil the national sustainable financial system [12].
  • The finance system has four strategic axes that are opportunities to be enhanced. 1) Enable conditions which refer to improving current regulations and framework for public climate finance, environmental and social risks, green credits, and inter-institutional coordination. 2) Inclusion of sustainability criteria which aims to establish social and environmental standards for development banking, risk analysis, principles, and criteria for sustainable banking. 3) Development of sustainable financial mechanisms. This axe focuses on enhancing green and climate change credit lines, public-private partnerships, green and sustainable businesses, and identification of financing sources (i.e., REDD+ projects which positively impact society and environment at the local level). 4) Climate financing to link climate change strategies with financial instruments, measurement methodologies, and monitoring of climate change impacts [12].

[1] Climate Bonds Initiative. 2021. Latin America & Caribbean: State of the market 2021.

[2] Inter-American Development Bank Group (IDB), 2019. IDB Invest supports Banco Pichincha in the first issuance of green bonds in Ecuador's stock market. [Online]. Available:

[3] Banco Pichincha, 2020. Green Bond Framework: Summary the Banco Pichincha’s Green Bonds Framework.

[4] International Monetary Fund, 2021. IMF Country Report No. 21/228: Ecuador.

[5] UNEP FI, 2021. Ecuador, Sustainable Finance Activities.

[6] Asociación de Bancos del Ecuador (ASOBANCA), 2022. El sistema bancario cada vez más sostenible. [Online]. Available:

[7] UNDP, 2019. Promoting sustainable business, banking and finance for the bio-economy in Ecuador. [Online]. Available:

[8] FAO, UNDP, and UNEP. 2015. UN-REDD Programme, Success Stories. Ecuador: successfully positioned to implement national REDD+ Action Plan.

[9] Climate and Forests and UNDP, 2020. Ecuador will restore deforested and degraded areas and promote sustainable production. [Online]. Available:

[10] Secretaría Nacional de Planificación y Desarrollo. 2017.  Plan Nacional de Desarrollo 2017-2021. Toda una Vida.

[11] Secretaría Nacional de Planificación. 2021. Plan de Creación de Oportunidades 2021-2025.

[12] Ministerio del Ambiente y Agua y Ministerio de Finanzas del Ecuador. 2021. Estrategia Nacional de Financiamiento Climático.