In an initiative led by the Sustainable Brazilian Finance project (FiBRas), a partnership between Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) with the Brazilian Ministry of Economy and endorsement by the Financial Innovation Laboratory (LAB), SITAWI and Frankfurt School analyzed the current stage of the main regulations related to sustainable finance in Brazil and its main opportunities.
Brazil is at a crossroads with sustainable finance. Greater integration and mainstreaming of sustainability in the financial sector will be necessary to make Brazil’s financial system more stable, and to strengthen national capacities to reap the opportunities of sustainable finance. The aim of this paper is to contribute to the discussion of how Brazil can best position itself in this process.
Brazil’s financial actors pushed sustainable finance forward in 2020 despite the COVID-19 outbreak. Examples include the Central Bank of Brazil (BCB) joining the Central Banks and Supervisors Network for Greening the Financial System (NGFS) and launching its new sustainability agenda, which focuses on the development and improvement of regulatory and supervision instruments. The biggest national platform for innovative and sustainable finance, the Laboratório de Inovação Financeira (LAB), became the first South American member of the International Network of Financial Centres for Sustainability (FC4S). Finally, the issuance of Federal Decree No. 10,387/2020 extended the list of sustainable infrastructure projects eligible for issuing incentivised debentures.
A holistic strategy will be vital to enhance the impact of sustainable finance in Brazil. It will make financial markets more attractive, improve market opportunities, and reduce sustainability-related risks and transaction costs. The development of a Brazilian sustainable finance strategy would need to follow guiding principles. A multi-public sector committee should lead the development of this strategy, supported by other market participants. This white paper recommends nine concrete policy options for immediate implementation