The Climate Bonds Initiative (CBI) and the Business Council for Sustainable Development (CEBDS) are set to meet on Friday November 4th during the second meeting of the Brazilian Council for Sustainable Market Development.
The session, to take place in São Paulo, will continue to explore the opportunities identified at the inaugural meeting of the Council held on September 2nd.
The first of its kind, the role of the Brazilian Council for Sustainable Market Development is to develop and promote policy solutions and market mechanisms that will catalyse a robust pipeline of Brazilian green investments opportunities.
The Market Council will build a roadmap to unlock the huge investment potential of Brazil’s new economy. By tapping into global investor demand for green investment opportunities, this pipeline will attract both domestic and international capital at the scale required for the country to transition to a more self-sustaining economy.
The Council brings together 25 high level representatives from leading market actors in Brazil’s pension funds, public and private banks, insurance companies, financial institutions and key productive sectors. Pooling their considerable expertise and market weight, they will leverage existing initiatives and information flows on green finance, disseminating best practice and enhancing implementation.
There is huge potential here to build Brazil into an international leader in green finance and investments.
“The Climate Bonds Initiative is very excited about supporting the growth of a diverse green bonds market in Brazil. There is huge potential here to build Brazil into an international leader in green finance and investments; a strong green bonds market is just the start. The Council is a critical component in building this market. It’s only by bringing all the market stakeholders together that we can foster sustainable investment and growth,” says Justine Leigh-Bell, Climate Bonds Director of Market Development.
“Brazil is a key player in global climate change talks and has substantial low-carbon investment opportunities. Together, we need to build a National Strategic Plan to harness these investment opportunities for the new low-carbon economy in Brazil. The Council’s work on strategies to attract local and foreign private capital at the scale required to finance these investments is of critical importance”, adds Marina Grossi, president of CEBDS.
Denise Hills, Itaú Unibanco Superintendent of Sustainability and Inclusive Business, says:
“The Council is a way to discuss new models of projects and initiatives and to accelerate the implementation of the existing ones, an important business instrument in the current context”.
Sylvia Coutinho, president of UBS in Brazil, estimates that there is an important global pool of capital targeted for green investments and impact investments:
“Volumes only tend to grow even more when we have negative rates of return in several developed economies. We need to find ways to attract this capital to Brazil, which has one of the largest potential for green investments in the world. The Council, which brings together the key stakeholders interested in strengthening this market, is undoubtedly an important step in that direction. ”
“To fully leverage the Brazilian green investment opportunities out there, we need to educate domestic market stakeholders, from potential issuers and investors to underwriters. There is a lack of knowledge in this subject, with the focus only on the need to see price reduction. We need to identify climate compatible infrastructure development and encourage labelled green bond issuance to fund such projects” says Mario Sergio, Institutional Relations Director of Febraban (the Brazilian Bank’s Federation).
Elizabeth Carvalhaes, President and CEO of Ibá and member of the Council says:
“This is crucial time for our industry to make the transition to more sustainable finance instruments, for example by issuing green bonds. The clear roadmap that this Council is developing will provide a real boost in our efforts to do this.”
At the first Council meeting, participants identified the following opportunities which future council meetings will explore in greater depth:
Make the most of the government’s coordination with the private sector on implementation of the main goals of the Nationally Determined Contributions (NDC), with high potential for value creation, especially in biofuels and renewable energy;
Scale up and leverage both domestic and foreign investments in the Brazilian markets, with market education and instruments to attract both national and international investors:
- Engage and educate the Pension Funds to the benefits of a green bond market
- Boost Brazilian investment credibility abroad, through internationally recognised green bond standards and principles
- Take advantage of the greater awareness of climate impacts amongst forestry and agribusiness companies and the need for increased funding for eligible projects
- Facilitate the development of a green bond market as an attractive alternative financing instrument for infrastructure
- Learn from the best practices both from Brazil and internationally to help develop the Brazilian market.