Initiatives to promote sustainable investment in the productive sectors in Argentina and ParaguayBOX 17 Argentina The Sustainable Finance Protocol, established in 2019 and renewed in 2024, is a voluntary agreement among 38 financial entities to promote international best practice in sustainability.90 While this protocol represents 24.5% of the loan market share and encourages higher standards by integrating environmental and social risk analyses into credit assessments, it lacks regulatory backing from Argentina’s Central Bank, limiting its implementation compared to mandatory frameworks in Brazil and Paraguay. According to consultations with experts, the voluntary nature of this protocol is both a strength, fostering institutional leadership and a weakness, as it relies on self-regulation. Nonetheless, the protocol also benefits from a regional network of financial institutions, including BID Invest (Inter- American Investment Corporation), which provides financial and technical support to scale-up sustainable practices within financial institutions. Paraguay A Central Bank Regulation (Resolution No. 8/2020) requires financial institutions to incorporate environmental and social risk assessments into their lending processes. Producers must provide documentation verifying the legality of their agricultural activities, such as environmental licences and land-use plans. Other examples include the Procampo Verde Project created by the Paraguayan Development Finance Agency (AFD). Established and approved in 2024, Procampo Verde aims to finance sustainable and regenerative livestock practices. This programme, co-created with international organizations, offers lower interest rates compared to traditional loans and supports projects focused on water management, pasture improvement and reducing pressure on natural resources. It sets sustainability conditions, such as a prohibition on land- use changes from December 2020 and imposes penalties for non-compliance, such as increased interest rates. For Paraguay, scaling-up Procampo Verde’s resources must be a top priority for the financial sector and economic authorities to drive sustainable development in the country. Paraguay’s Voluntary Green Taxonomy,91 launched with support from the Inter-American Development Bank (IDB), provides a classification system to identify environmentally sustainable economic activities. It aims to guide investors, financial institutions and policy-makers in aligning investments with climate resilience and sustainability goals. The taxonomy defines key sectors such as energy and construction, and establishes criteria for climate mitigation and adaptation. While it enhances transparency and green finance opportunities, its voluntary nature and lack of regulatory enforcement may limit widespread adoption compared to mandatory frameworks in other countries. Overall, despite some isolated initiatives, the actions of the financial sector fall short of matching its level of relevance, exposure and influence, as highlighted by a 2023 Forest 500 report that assessed companies, banks and investors’ progress in tackling deforestation and conversion.92 In this context, collaborative initiatives are essential to help banks and investors understand the urgency of taking action and to provide them with training on how to transform their practices. In Bolivia, since 2023, WWF has been supporting financial institutions through the DCF Implementation Toolkit in collaboration with a major investor and a development bank. This toolkit focuses on helping institutions restructure internally, commit to deforestation- and conversion-free portfolios, develop actionable plans, assess the risks they face and engage and mobilize their clients and investees. Through projects like this, WWF aims to support committed companies that can demonstrate the feasibility of adopting and implementing such commitments, thereby encouraging their local peers to follow suit.93 The Amazonia Forever programme, led by the Inter- American Development Bank (IDB), serves as a model for integrating blended finance, public-private partnerships and sustainable investment strategies to drive regional development. By bringing together all countries within the Amazon biome – Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru and Suriname – the initiative fosters collaborative resource-mapping, project preparation and multi- stakeholder coordination. Through this approach, it mobilizes funding for sustainable agriculture, conservation and infrastructure, ensuring that investments are both environmentally responsible and socially inclusive, with a strong emphasis on local community engagement.94 A similar financial framework could be adapted for the Gran Chaco, addressing investment gaps in conservation, sustainable land use and climate resilience. Strengthening financial instruments, such as green bonds, carbon markets and credit incentives, while aligning with international sustainability standards, could unlock funding opportunities and accelerate regional development. For Paraguay, scaling-up Procampo Verde’s resources must be a top priority for the financial sector and economic authorities to drive sustainable development. The Gran Chaco: Pathways Towards a Sustainable Future 40

The Gran Chaco Pathways Towards a Sustainable Future 2025