Diana Carrillo Sosa is an Analyst in Debt Capital Markets and Structured Finance at IDB Invest. Before joining IDB Invest she worked in private equity, venture capital, and impact investing. She defines her professional goal as developing and supporting solutions that contribute to climate change mitigation and social justice. Diana earned a master’s degree in psychology of Economic Life from the London School of Economics and Political Science and has a undergraduate degree in finance from the Instituto Tecnológico Autónomo de México.
Latin America and the Caribbean has become a leading region in gender bond issuance aimed at bolstering women’s empowerment. These instruments offer a promising capital market solution to mobilize funds towards projects that help accelerate parity.
The risks involved in sustainability-liked bonds often focus on insufficiently robust and ambitious targets and KPIs, improperly crafted incentives and structural loopholes. All these can be alleviated with better monitoring of issuers.
Sustainability-linked bonds provide issuers with much leeway for the use of proceeds and market participants are getting a better understanding of their risks and rewards, as well as how they can be “gamed”. Green-washing is only one of several risks looming.