In 2025, the Financial Superintendence of Colombia (SFC), introduced new regulation and guidance requiring supervised financial institutions to integrate environmental and social risk management systems, often known as SARAS (Sistema de Administración de Riesgo Ambiental y Social), into lending and risk monitoring processes.
To support financial institutions with SARAS, this overview explores how ENCORE can be used to assess nature-related dependencies and pressures linked to financial transactions. The overview includes a case study exploring how Banco de Bogotá, a major Colombian bank, applies ENCORE to its SARAS processes. While the focus of this case study is on SARAS in the Colombian context, the insights may also be relevant for organizations adopting SARAS or similar systems in other Latin American countries.
SARAS in Colombia: background and evolution
Financial institutions use environmental and social risk management systems (SARAS) to strengthen resilience against growing risks linked to climate change, nature loss and social harms and to meet international standards such the IFC Performance Standards and the Equator Principles.
In Colombia, use of SARAS in the financial sector has become increasingly formalized across the last decade. The Colombian Banking Association, Asobancaria, has played a central role in supporting financial institutions to implement and strengthen SARAS frameworks. Through guidance, peer learning, technical support and coordination initiatives, Asobancaria has helped standardize practices and build capacity across the sector. According to Asobancaria’s 2024 Sustainability Report:
- 37% of financial institutions had implemented SARAS by the end of 2024.
- 39% were identifying nature-related risks.
- 31 banks had established internal structures dedicated to climate change and 24 for nature-related issues.
In parallel to Asobancaria’s capacity building work, the Financial Superintendence of Colombia (SFC) has formalized regulatory expectations relating to SARAS. In October 2025, it issued a set of mandatory guidelines requiring supervised institutions to integrate environmental and social risk into core credit processes.
Through SARAS, the SFC expects financial institutions to identify, measure, manage and monitor environmental, social and climate risks in line with their risk profile. Such efforts should result in strengthened risk-based supervision and alignment of the Colombian financial system with national and international best practice. The SFC does not require SARAS to be applied to all transactions and assets. Instead, institutions must determine which risks are proportional and relevant to their business.
The SFC provides specific guidance for applying SARAS to credit operations, requiring lenders to introduce:
- A preliminary screening to identify which operations fall within the scope of SARAS.
- The classification of operations into high, medium or low risk categories.
- Risk-based monitoring, with enhanced oversight for operations with higher risk exposure.
SARAS is designed to align with international reference frameworks such as the Equator Principles and IFC Performance Standards. It also complements broader sector-led initiatives in Colombia, led by the SFC, financial institutions and Asobancaria. This includes the Green Protocol, Sustainable Finance Objectives coordinated by Asobancaria and the National System for Biodiversity and Adaptation.
Alignment between SARAS and ENCORE
ENCORE can be a useful starting point for assessing, classifying and prioritizing nature-related risk under SARAS and is being used by a wide range of Colombian lenders to meet nature-risk requirements.
It can be challenging for financial institutions to access specific data relating to their clients’ dependencies and impacts on nature, but by using sector-level information, ENCORE can provide a useful proxy for potential exposure. The free, online tool and knowledge base sets out how 271 economic activities depend on ecosystem services and exert pressures that can lead to impacts on natural ecosystems.
Assessing exposure to these dependencies and pressures can help financial institutions better understand which nature-related risks may be most relevant to their clients. This might include physical risks due to loss of water provisioning services, or transition risks such as reputational or regulatory risks linked to impacts on biodiversity. ENCORE materiality ratings, which rank dependencies and pressures from low through to very high, can also help organizations compare exposure across financial assets and prioritize high-risk clients for more detailed assessment using location and asset-specific information.
How Banco de Bogotá uses ENCORE to strengthen assessments of nature-related risks under SARAS
Banco de Bogotá is Colombia’s largest bank and a signatory of UNEP FI’s Principles for Responsible Banking. It introduced a SARAS into its risk management approach in 2020, implementing climate risk in 2021 and nature-related issues in 2024. During that year, 445 clients were assessed using the bank’s SARAS framework.
Banco de Bogotá uses ENCORE to guide the assessment of nature-related risks for credit applications and renewals. The tool and knowledge base enables its environmental and social risk analysts to assess how clients’ economic activities may depend on ecosystem services and contribute to pressures on nature. For each assessed client, the bank uses ENCORE to identify the most material ecosystem service dependencies, such as water purification, flood mitigation or pollination, and the most material pressures, such as generation and release of solid waste.
These insights are incorporated directly into Banco de Bogotá’s SARAS analysis sheet, a working document used to guide analysts in defining risk levels and determining if further location-specific assessments are required. Location-specific assessments might include checking compliance with current or future regulation or assessing localised ecosystem condition to identify physical risks linked to client operations. These approaches allow analysts to categorize clients as high, medium or low environmental risk and guide the bank’s lending and engagement decisions.
Additionally, ENCORE and SARAS support Banco de Bogotá to carry out due diligence and align with international standards. For example the tool helps analysts determine whether a clients operations are at risk of breaching IFC Performance Standard 6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) through impacts to critical habitats or ecosystem services. Information gathered on clients using SARAS has also been used to support Banco de Bogotá’s 2025 report on nature-related risks and opportunities following the Taskforce on Nature-related Financial Disclosures’ LEAP approach.
SARAS helps banks strengthen resilience to nature-related risk and realize nature-related opportunities
As regulators and financial institutions expand the scope of risk management and refine methodologies, ENCORE can support assessments by providing a structured, science-based approach to understanding how economic activities may depend on and impact nature.
SARAS implementation represents a significant step forward for the Colombian financial system in strengthening environmental and social risk management. While the focus of this document is Colombia, adoption of SARAS is also being driven by financial institutions and regulators in other Latin American countries. To find out more about how ENCORE has been used for SARAS and the TNFD, check out our case studies on Davivienda, Colombia and Banco Bolivariano, Ecuador (coming soon).
Hundreds of organizations use ENCORE to support the assessment of nature-related financial risk, for SARAS and other risk management and disclosure frameworks including the TNFD. ENCORE was developed by Global Canopy, UNEP FI and UNEP-WCMC (the ENCORE partnership) and can be accessed here.