The Central Bank (BC) launched, In the beggining of september, a set of social and environmental responsibility actions. The sustainability dimension was included in the BC# institutional agenda and included internal environmental awareness campaigns, incorporation of climate risk scenarios into BC stress tests, until the adoption of more comprehensive measures, as the creation of a financial line of sustainable liquidity for banking institutions.
During the presentation, the BC president, Roberto Campos Neto, highlighted the centrality of the environmental issue for the sustainability of the financial system itself. “The environmental issue is extremely important and arouses great interest in society. The environmental issue has definitely entered the agenda”, affirmed.
“In the sustainability dimension, let's deal with the environmental issue from a financial point of view.. Let's talk about promoting sustainable finance, proper management of social, environmental and climate risks, integration of sustainable variables and other elements that affect BC decision making”, added.
According to BC's Director of International Affairs, Fernanda Nechio, among the measures to be adopted internally by the BC are campaigns to encourage the use of bicycles, carpool adoption, reduction in the use of plastics, recycling and selective collection. The theme should also be part of the Museum of Economy, maintained by the institution.
In relation to general actions, the director announced the creation of a sustainable liquidity financial line for financial institutions, having private credit operations or security as collateral. In the case of international reservations, sustainability criteria will be included for selection of counterparties in wealth management and for investment selection.
The BC also informed that it will implement the recommendations of the “Task Force on Climate-Related Financial Disclosures” (TCFD, in the acronym and english), which gathers guidelines for companies and financial institutions in the dissemination of information regarding the financial impacts of climate change on their businesses. Furthermore, the BC# agenda provides for an improvement in the approach to risk management and the preparation of an annual BC report on socio-environmental risks.
Green Bureau of Rural Credit
BC's new sustainability agenda also includes the creation of abureau rural credit green. In practice, Obureau will replace the Rural Credit and Proagro Operations System (Sicor) do BC, in a format ofopen banking, in which customer data are open for consultation by different financial institutions.
According to BC's regulation director, Otávio Damaso, Obureau it will incorporate criteria that identify operations with green characteristics and will also cross-reference it with information such as geo-referencing data.
“We will be able to identify overlapping with environmental preservation areas, overlap with indigenous land areas, and this criticism will occur at the time of contracting the credit operation. So if there is any overlap, the operation itself cannot be performed because it will have a lock”, stated.
Still according to Damaso, the goal is to increase by up to 20% the contracting limits for rural credit operations that meet sustainability characteristics.
Private sector
For the president of the Brazilian Federation of Banks (Febraban), Isaac Sidney, more resources need to be channeled to finance a transition to a green economy. “in December of last year, we come to 22% of the credit portfolio balance for the sectors that contribute to the green economy chain”, affirmed.
About burning and deforestation in the Amazon, Sidney expressed concern and stated that the issue did not “can't be another chapter apart”, because “is at the center of a great competitive advantage” to Brazil.
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