Financial Superintendence of Colombia proposes socio environmental pricing system for supervised entities to assess development projects

The Financial Superintendence of Colombia has presented a proposal to create a socio-environmental pricing system that supervised entities could use to evaluate private and public development projects in Colombia. The proposal aims to move project assessment beyond private profitability by incorporating social welfare and environmental sustainability into financing decisions. Presented at a forum on socio-environmental pricing as a tool for sustainable investment, the proposed system would estimate the social value of six core factors and variables: labor, public revenue, investment, foreign exchange, carbon, and the social discount rate. In practical terms, it would favor labor-intensive projects, especially those that absorb idle or underemployed workers, projects that generate or save foreign exchange through higher exports or efficient import substitution, projects that strengthen public revenue and the State’s capacity to provide public goods and regulation, and initiatives with a lower carbon footprint or net climate mitigation and adaptation benefits.