Texan by Nature is excited to recognize North American Development Bank (NADBank) as a 2022 TxN 20 honoree for their leadership in conservation and sustainability. North American Development Bank’s commitment to conservation, their projects, programs, best practices, and lessons learned are an example and inspiration for us all.

Honoree Name: North American Development Bank (NADBank)

Honoree Industry and Size: Financial Services – Small 

Drinking Water Distribution System for Vinton, Texas

Company Overview: NADBank is a binational financial institution established by the Governments of the United States and Mexico to provide financing to support the development and implementation of infrastructure projects, as well as to provide technical and other assistance for projects and actions that preserve, protect, or enhance the environment in order to advance the well-being of the people of the United States and Mexico. 

What is your conservation and sustainability mission and why is it important to your culture?
NADBank is dedicated to supporting the sustainable development of the U.S.-Mexico border region. Our commitment to this goal requires strong relationships and collaboration to achieve long-term environmental investments in an economically and culturally dynamic region.
The Bank’s core values include client focus, transparency and accountability, quality, integrity, and sustainability. Under sustainability, we actively promote sustainability and knowledge so as to ensure that the future of border communities is better than today and that our ability to serve is preserved.
Sustainability is at the core of the work and culture of NADBank as we work to accomplish our vision and mission.

NADBank’s Vision: NADBank is a leader in binational cooperation, catalyzing environmental infrastructure investments to achieve sustainable development in the communities it serves through exemplary and innovative financial, technical and environmental solutions of the highest standards.

NADBank’s Mission: NADBank provides financing to support the development and implementation of environmental infrastructure projects, as well as technical and other assistance for projects and actions that help preserve, protect and enhance the environment of the border region in order to advance the well-being of the people of the United States and Mexico.

How is conservation and sustainability a part of your business strategy?
Per our mandate, all NADBank-funded projects must have an environmental benefit. Most of these projects also have a climate-specific benefit. NADBank has determined that: 

• (i) all of its renewable energy projects have a clear mitigation benefit; 
• (ii) many water-related projects have a clear adaptation benefit, such as flood control and water conservation, 
• and (iii) the remaining water projects have some level of a mitigation or adaptation component. 

Under this classification, 59% of investments made in infrastructure projects already in operation have a direct climate benefit, while an additional 28% have less direct benefits related to water. Read more in our annual report.

The border region faces the double challenge of maintaining its economic growth, cultural vitality, and binational collaboration while improving environmental conditions and resiliency. For the Bank, this challenge includes providing universal water, wastewater and solid waste service coverage, replacing aging infrastructure and investing in climate change adaptation and mitigation. In short, it means continuing its innovative work by providing financing so that the border region becomes a greener, more efficient, and more livable place.

Recognizing NADBank’s role in meeting these challenges, at the end of 2021, the Bank’s Board of Directors agreed to expand the environmental scope of the institution by incorporating a wider variety of eligible projects—such as sustainable buildings and industrial parks, green manufacturing and mobility—while maintaining a strong commitment to the priority areas of water and waste management. In addition to addressing legacy environmental issues, the new project types will allow the Bank to better invest in actions that combat climate change and promote a greener economy.

What are your company’s short and long-term goals as they relate to conservation and sustainability?
NADBank’s short- and long-term goals continue to be financing sustainable infrastructure projects that provide environmental benefits while also improving the quality of life for U.S.-Mexico border residents.

We work closely with public and private project sponsors to structure appropriate and affordable financing packages that meet the specific needs of each community or project. In addition to loans, NADBank offers grants through its Community Assistance Program (CAP), as well as administers grants from other entities. Likewise, it provides and administers technical assistance for studies and other activities to support the development and long-term sustainability of those projects. In response to the crisis caused by the global pandemic, NADBank established the COVID-19 Recovery Program (ProRec) to provide both financing and technical assistance to help mitigate the economic and social impacts of the pandemic on border communities. 

The unifying factor, bank managing director Calixto Mateos Hanel said, is that all funded projects must be environmentally-friendly by either preventing or reducing contaminants—that’s a requirement of the bank’s founding charter. It’s also one of the reasons that the bank is now looking to lend to projects like clean transportation and energy storage, according to bank representatives.

“Over the last 25 years, the bank has made critical investments in our border communities, everything from new solar plants and wind farms to water treatment facilities and sewer lines. The bank has driven investments that improve air quality and water quality and helped build a healthier, safer and more vibrant border communities along our southern border.”

-U.S. Senator John Cornyn

Who in your company is leading your conservation and sustainability efforts and what are some examples of employee engagement in conservation and sustainability at your company?
The Bank’s Management team is led by a group of highly experienced professionals committed to fulfilling NADBank’s mission as a leader in binational cooperation aimed at catalyzing environmental infrastructure investments and achieving sustainable development in the communities it serves.

Since 2017, Salvador López-Córdova,  the first Chief Environmental Officer (CEVO) of NADBank, leads the Bank’s conservation and sustainability efforts. He is responsible for overseeing the environmental integrity of the operations of the Bank and the projects being considered for financing. The CEVO position is part of the Bank’s three-person management team. Salvador has more than 20 years of professional experience in environmental, water and other sustainability issues, including significant experience in the U.S.-Mexico border region. 

Some examples of employee engagement in conservation and sustainability include:

Gold Tier status for the City of San Antonio’s ReWorksSA Program
NADBank was recognized by the City of San Antonio’s ReWorksSA program and certified as Gold Tier in their recycling program.  The award exemplifies commitment towards conserving natural resources, following recycling best practices ,and becoming a distinguished champion in environmental leadership. It was completely employee-driven.

Since 2020, several initiatives were undertaken by the Bank to achieve the Gold Tier designation including:

• Formed an employee-led Sustainability Committee to recommend changes to Management.
• Removal of personal printers, which eliminated use of additional toner cartridges.
• Printing on both sides of paper to save paper.
• Motion sensors to automatically turn on and off lights in each individual office.
• Implementation of an Environmental Purchasing Policy.
• Procurement policy encourages the purchase of Energy Star® appliances or energy-efficient servers.
• Electronic procurement approval system implemented to reduce use of paper. 
• Increased signage and bins for recycling in break rooms for employees.

Carbon Offsets
NADBank Management approved and recently implemented the purchase of carbon offsets for each flight that NADBank staff takes on work-related travel. Carbon offsets are voluntary schemes whereby people pay to offset or make up for the emissions their flights produce. NADBank uses the SAP Concur system for expenses, which has been modified to include the carbon offset field.  Now, Carbon Offset in Concur can be used in Travel Requests and Expense Reports.  When booking our flights, each airline has its own section to pay for the flight’s carbon offset. As a recommendation from the Bank’s employee-driven sustainability committee, that list of specific links has been shared to all employees to utilize when booking upcoming travel.

What conservation and sustainability programs and projects does NADBank lead and participate in?
Our Green Bond Program has been a fundamental tool for raising capital to implement important projects. It is also part of our commitment to offer genuine climate and environmental investment opportunities to private investors. 

Since 2018, NADBank has issued three green bonds totaling US $478 million that have supported 15 projects to date. All proceeds of the green bonds are managed and allocated to infrastructure projects in accordance with the Bank’s Green Bond Framework, which was first developed in 2018 and was updated in 2020. The framework is consistent with the rules established by the International Capital Market Association in the Green Bond Principles and received a positive second-party opinion from an independent reviewer.  

At the end of 2021, the proceeds from the green bonds had been used to support 10 renewable energy projects with an installed capacity of 1,393 megawatts, sufficient to serve 478,600 households annually and mitigate 2,032,470 tons of carbon dioxide. In addition, four sustainable water and wastewater projects were also financed benefitting 826,790 people by providing 2,381 liters per second of wastewater treatment capacity and improved water services, along with one landfill expansion project benefitting 54,258 people with the capacity to continue properly disposing of 130 tons a day of waste. The positive results of this program bolster our continued commitment to a cleaner and more prosperous border region as it transitions to a greener economy. Read the full report.

In 2021 the Mexican Green Finance Advisory Council (CCFV) recognized the Bank’s leadership in sustainable financing in Mexico as the first multilateral bank to issue a green bond in the international market for financing projects in Mexico.

BayWa Corazon Solar Project in Webb County, Texas;

How do you see the future of conservation and sustainability evolving, and what role will NADBank play in that progress?
Pursuing its mission to improve the environment and quality of life for U.S. and Mexican residents in the border region, NADBank will continue to play a leading role in helping communities build climate-resistant infrastructure and transition to a green economy. 

In December 2021, the NADBank Board of Directors agreed to complement the Bank’s current lending portfolio with investments in a wider variety of infrastructure projects that will help tackle climate change and promote a green economy. This expansion of eligible projects for financing will grow the Bank’s loan portfolio and promote new project types that are important for both the U.S. and Mexico.  This direction will continue to keep the Bank at the forefront of developing and financing environmental infrastructure that improves the quality of life for the residents of the U.S.-Mexico border region. This will allow the Bank to continue to generate environmental benefits for border communities, advance climate change adaptation and mitigation goals, and assist the region in a transition to a green economy through expanded project eligibility. 

With the strategic expansion of projects, the Bank will be able to invest in infrastructure related to energy storage, mobility (including ports of entry), urban development, sustainable buildings and industrial parks, green manufacturing, sustainable food value chains, climate change adaptation, and climate resilience, among others. The future of sustainable development remains bright for NADBank!  

“We are excited to take full advantage of NADB’s lending capacity to address other urgent infrastructure and environmental needs in the U.S.-Mexico border region,”

-Calixto Mateos Hanel, NADBank Managing Director.

How does NADBank quantify investment and return on conservation and sustainability?
As a binational financial institution owned and operated by both federal governments of the United States and Mexico, the mission of the Bank is to improve the quality of life for border residents through the financing of environmental infrastructure.  In order, to accomplish this mission, the impacts measured are more social and environmental, specifically related to how the residents’ lives are being improved, as opposed to return on investments and money saved.  

For example in 2021, some of the metrics analyzed for the Bank’s environmental infrastructure projects included water savings, energy savings, clean energy produced, greenhouse gas emissions avoided, increase in energy storage capacity, miles of drinking water lines installed, installation of drinking water hookups, new or improved water distribution lines installed, new or improved wastewater treatment systems capacity installed, on-site wastewater disposal (septic) systems decommissioned, miles of wastewater collection system lines installed, number of wastewater connections installed, million gallons per day of additional treated wastewater, increased access to wastewater collection, eliminated untreated or inadequately treated wastewater discharges and PM10 emissions avoided.

The Bank establishes expected investment outcomes and documents achievements, as well as provides substantial project oversight and support throughout the development and implementation process, resulting in highly efficient funds management. For NADBank, it is important to know that the projects it finances are not only completed as designed, but also perform as intended to improve the environment and related health conditions for border residents. NADBank estimates the anticipated impact of the projects to be financed prior to approval and routinely verifies actual project impact after the initiation of operations. 

Key indicators are selected and quantified for each project type. Anticipated impacts are based on many well-researched assumptions (such as production rates, state energy matrices and emission factors) and expected project scope. Through its Results Measurement System, NADBank tracks and evaluates actual project performance and impact with respect to the targets set for environmental results during the approval process. Because of the level of due diligence performed by NADBank during that process, the actual results of most projects are reasonably close to those anticipated at approval.

The Results Measurement System consists of two components: a closeout process conducted after the project has been in operation for a year and a more in-depth impact assessment for select projects. The closeout process serves to document and assess the physical facilities built and their performance within a year after initiating operation. It is an effective tool for verifying whether the project was constructed as approved and has been operating as intended.

An impact assessment is performed to ascertain the actual impact of the project on specific environmental and human health indicators in the long-term. It serves to verify whether the project is having an impact beyond its physical outputs and outcomes by providing environmental and health benefits to the intended population.

Examples of these reports are available here.

Internal Environmental, Social, and Governance (ESG) Initiatives 

In 2021, NADBank performed a needs assessment of its internal policies and procedures and identified areas of opportunity to enhance the environmental and social analysis of its investments. As a result, NADBank is working on various initiatives that will better align its operations and reports to current best international practices related to impact and climate investment. These initiatives include:

• Environmental and Social Risk Management System (ESRMS) to better analyze and track the potential impact of projects on the environment and communities, as well as identify preventive and remedial actions. 
• ESG Scoring and Rating System to evaluate all investments to identify potential financial risks related to environmental, climate, social and governance issues that could impact their performance. 
• Enhanced communications and outreach procedures with external stakeholders, as well as disclosure of ESG procedures, risks and opportunities, including climate risk. 

“Over the last few years, NADBank’s strategic direction has been sharpened to focus on sustainable investments that help develop the border region while combating and mitigating climate change, in coordination with public and private sector sponsors, no matter how big or small. This TxN 20 award is an endorsement of NADBank’s commitment to the principles of environmental sustainability and transparent management of its financial and investment resources.” 

-Calixto Mateos Hanel, NADBank Managing Director

What is the one lesson that your company has learned from your conservation and sustainability efforts that others can take back and think about applying within their own space?
Technical assistance has served as a linchpin for NADBank’s success, advancing its mission by fortifying project sustainability, building the institutional capacities of border communities, generating knowledge on new technologies and emerging issues, and forging strong collaborative relationships among stakeholders at all levels of government, as well as with civil organizations, academia and the private sector. 

Providing financial and technical services to support project planning and design, as well as to strengthen the institutional capacities of those responsible for operating and maintaining the new infrastructure, helps ensure the long-term sustainability of the projects NADBank finances. Although technical assistance represents the NADBank’s smallest proportional investment in a community, it has proven to be the foundation for the successful development and implementation of infrastructure projects.

NADBank also actively pursues opportunities to partner with other public and private organizations to promote and leverage environmental sustainability in the border region. The success of many of its projects and technical assistance initiatives is thanks to the cooperative efforts of various entities coming together to pool, not only their financial resources, but also their technical expertise.  

Wastewater Infrastructure Project in Marathon, Texas

Why is Texas an important home or base of operations for your company?
NADBank is headquartered in San Antonio and has a satellite office in Ciudad Juarez, Chihuahua, directly across from El Paso. Being based in Texas has provided a project-rich home state.  With nearly a 1,255-mile shared border with Mexico, Texas is an optimal location and has benefitted from the Bank’s financing programs. Of the 140 projects located in the U.S., 76 are in Texas and of the US$1.5 billion in funding provided to projects in the U.S., just over half has gone to support projects in Texas (approx. US$750 million).  

Learn more about NADBank’s conservation and sustainability efforts here.