The IJGlobal ESG Awards 2024 judging panel chose Scotiabank to win the lender award for Latin America with one admiring its “substantial commitment” with “great case studies showing depth and diverse lending”.

Another of the judges said: “Scotia integrates itself in a meaningful way in local communities, meaning that its ability to make an impact at a human level is higher than that of other financiers.”

Yet another judge added: “Scotia presents itself as a standout candidate across the board, making true impact at local and regional levels.”

The judges were impressed by Scotiabank’s committed to mobilise C$500 million in community investment and C$350 billion towards climate-related finance by 2030 in addition to C$10 billion to transform housing affordability across Canada. As of the end of last year (2023), Scotiabank had mobilised C$132 billion (cumulative) of these targets.

From the start of last November, Scotiabank brought into effect an enhanced climate-related finance framework, outlining in-scope activities for the inclusion in the bank’s climate commitment.

This includes:

• eligibility – considered based on the appropriate impact correspondence with the classification of transactions
• eligible activities include – lending, advisory services, capital markets activities, securitisation, treasury investments, and deposits
• eligible use of proceeds categories include – low-carbon energy, low-carbon transportation, circular economy adapted products, low-carbon fuels, among others

On the environmental policy front, Scotiabank’s ESG risk management framework is crafted in accordance with its Equator Principles framework and aligned with its enterprise-wide risk management framework.

Scotiabank accounts for environmental and climate-related risks through its climate risks heatmap with existing credit risk policies, credit due diligence and adjudication processes, consisting of the mandatory climate change risk assessment in accordance with a comprehensive evaluation of the borrower’s management and mitigation strategies.

A separate risk assessment for select ESG-labelled products is maintained to support robust ESG risk management practices as well as providing ambitious advisory solutions on use of proceeds and sustainability-linked products structuring with credible and innovative industry-approved best practices.

Scotiabank’s primary example of its market activity is Aguas Pacifico where in January 2024 it acted as MLA and hedge provider on an $817 million green term loan to Project Aconcagua in Chile.

Aguas Pacifico and Acueducto San Isidro are 2 SPVs created in 2016 for the development, design, and construction of a reverse osmosis desalination plant and a water transportation system.

This comprises a 1,000 litres/second multipurpose desalination plant to supply water for residential and industrial (mining) purposes to a range of clients, a 28km aqueduct and 76km water pipeline as well as 6km of water transportation systems.

The project seeks to contribute to Chile’s water scarcity crisis, taking advantage of non-continental water to meet human, agricultural and industrial demand in a sustainable way.

It is strategically located in Puchuncaví Region, an area with heavy water consumption and an existing water shortage.

Project Aconcagua also aids Chile in its transition towards a cleaner energy matrix as Chile depends on mining and about one-third of the country’s energy consumption comes from this industry.

About 50% of the energy used in mining currently comes from renewable sources, and with new clean energy projects like Aconcagua, it is estimated that this number will increase to 90% by 2030.