The Minister of Economy and Finance, Azucena Arbelechereferred this Wednesday to the concrete actions that the government has been taking to face climate changeand stressed that Uruguay must take advantage of opportunities to “promote” technological advances and financial innovations that generate investment and high-quality employment to improve the quality of life of citizens.
Arbeleche participated in the conference “Challenges of Energy Transitions”organized by the Regional Association of Oil and Natural Gas Companies in Latin America and the Caribbean (ARPEL), and ANCAP.
During her presentation, the minister framed the global situation, and expressed that the world is going through a new paradigm in the way business is done, in the way finance works, and where more and more it is demanded that products that are marketed are “responsible” from the environmental and social point of view.
Uruguay and ESG factors
Arbeleche maintained that the environmental factor, the first of the ESG factors (environmental, social and governance), is where the greatest speed in the paradigm change is observed.
“When I refer to a product or a service, I want to see what carbon footprint is behind that product, what is the impact that this product has had on the conservation of nature, on the care of the natural assets that each one of them has. those countries. And within this paradigm shift, the energy transition plays a central role because it has an impact on this whole new way of conceiving business”, he stated.
The minister highlighted Uruguay’s position in terms of ESG. “In more generic ESG terms, if we look at the indicator that JP Morgan has of 61 countries, Uruguay is number four with its complete evaluation in all three factors, and obviously that good position in terms of ESG has a positive impact on the capital market, financing and trade”, he assured.
In addition, the Secretary of State stressed that “today, Uruguay, thanks to its environmentally responsible position, in ESG factors, together with its prudence in macroeconomic policies, has its highest credit rating in its history.”
And it also has “the smallest credit spread in the stock markets,” he remarked. “The interest rate difference with respect to its benchmark in the United States is the lowest in Latin America,” he said.
The “deforestation free” seal
On the other hand, the minister expressed that in what has to do with production and trade, environmental responsibility and certified environmental attributes also give Uruguay an opportunity to have a positive competitive factor.
“If until now the size of Uruguay and the distance, the location of Uruguay, could be negative attributes for trade, incorporating environmental aspects makes the country more competitive, and allows it to be inserted in international trade chains in a much better way.”
“Just like today to export meat we need the foot-and-mouth disease-free seal, very soon we will need the deforestation-free seal,” said Arbeleche.
“The conservation of the native forest is going to be an attribute that our markets are going to ask us for. Today, and more and more going forward, Europe is analyzing how much of the product it buys has an impact on greenhouse gases; I refer to the border carbon adjustment mechanism. Although today it is not applied to meat, it is in fertilizers and in steel, that is where the world is going, ”he said.
“As an economic policy maker, one has the responsibility to look ahead and anticipate those times,” the minister commented, adding that Uruguay “has an enormous opportunity to differentiate itself due to the leading position it is having on environmental issues.”
