Sao Paulo!! Today!! Sean Kidney to Launch ‘Brazil Edition’ Climate Bonds State of the Market Report: New Economy Forum to Discuss Green Investment Opportunities

 

Climate Bonds CEO Sean Kidney will launch ‘Bonds and Climate Change: The State of the Market in 2016’ Brazil Edition in Sao Paulo later today.

Published in both Portuguese and English, the Brazil Edition of the Climate Bonds flagship report tracks all climate-aligned and green bonds issued within the Brazilian market from Jan 1st 2005 to May 31st 2016.  

The Brazil launch follows launch events in London, Madrid and Nairobi in which Sean Kidney outlined the reports main findings as well as recommendations to grow global and regional green bond markets. 

 

 

Sao Paulo Forum to Discuss Post COP21 Directions

The Forum, to be opened by Justine Leigh-Bell (Director of Market Development), will also feature ‘New Economy for Brazil Post COP21 keynotes and discussion, with contributions from leading business figures: Denise Hills from Unibanco, John Liu from Zurich Insurance, Guilherme Cavalcanti from Fibria and Ricardo Rochman from FGV. Justine is managing Climate Bonds engagement programmes in Brazil and throughout Latin America.

 

Brazil Edition - Widespread Climate Finance Opportunities:

The Brazil Edition analyses the local green and climate-aligned bond market, outlines green bond and capital market development options and identifies policy opportunities that can assist Brazil in the transition to a low-carbon climate-resilient economy.

 

Key Findings at a Glance:

  • As of end May 31st 2016, the total climate-aligned bonds universe stood at USD 2.4bn of which 23% were ‘labelled’ green bonds. 
  • Transport bonds linked to rail (such as public transit, urban and metro, freight and related construction) made up the single largest component of outstanding bonds at 54%, with the rail freight component a dominant sub-section at 46%.
  • At 23%, energy made up the next largest sector, comprising a mix of wind and renewables (small scale hydro, solar and biomass). The largest mixed renewables issuer was CPFL Renováveis.
  • The remaining 23% comprised a multi-sector USD 549m labelled green bond issued by the food company BRF. Its proceeds went to water and electricity efficiency projects, lowering carbon emissions and waste.

 

Core Sectors Crucial to Growth & Low Carbon Transition:

  • The report finds significant opportunities exist to lead in sustainable practices in agribusiness, forestry and paper industries.
  • Energy (excluding large scale hydro) including renewables and energy efficiency is a further sector well suited to long term green bond funding in support of new infrastructure.
  • Policy and regulatory steps involving capital markets and pension fund regulators are identified to overcome the relative immaturity of the domestic market and dominance of sovereign issuance.
  • Developments banks are also well suited to take steps to stimulate market development; as are commercial banks, municipal authorities and leading financial and industry institutions. 

 

Who’s saying what?

Justine Leigh-Bell, Director Market Development, Climate Bonds Initiative:

“Brazil has been a leading player in global climate change negotiations and the Sao Paulo launch of our State of the Market Report reflects the importance of Brazil in developing low carbon economic development and green growth following the COP21 Agreement.

“The Brazil Edition of the report identifies enormous potential for green bonds to fund low carbon development in domestic agribusiness, forestry, paper and renewable energy. Urban infrastructure upgrades in transport, energy efficiency and water are other areas suitable for long term green bond investment.”

 

Denise Hills, Head of Sustainability, Itau Unibanco:

“Brazil has an important role in international negotiations on climate change and has significant business opportunities in low-carbon investments.”

 

John Liu, Chief Investment Officer, Zurich Brasil:

“As long-term investors insurance companies can play a key role in the transition to a more sustainable, low carbon economy. At Zurich, we see green bonds as a critical piece in this puzzle. CBI's "Bonds and Climate Change" report is a great resource for all those who want to better understand the opportunity that green bonds represent, particularly for fixed income investors such as insurance companies.”

 

Gustavo Pimentel, Managing Director, SITAWI:  

“The Brazilian Government has already announced the desire to attract private capital to infrastructure development, reducing dependency from BNDES and leveraging capital markets. Green Bonds are a superb solution, as they free up capital in green assets to be invested in new asset development.”

“Brazil is ready to make it happen and we are delighted at SITAWI to contribute to market education and assuring the green credentials of assets being financed by green bonds.”

 

Ricardo Rochman, Head of Economic Department, FGV:

“The capital markets are an important source of finance for companies. As this Climate Bonds Initiative report demonstrates, Brazil has options to help address liquidity, reduce tax asymmetries and develop its domestic green bond markets and low carbon economy. Within this context, the Academy has an important role in providing solutions to address these challenges.”

 

The Last Word from Justine Leigh-Bell:

 

“The challenge now is for Brazilian policy makers and local market actors to create the conditions that accelerate the flow of green investment, while providing institutional investors with stable, long term returns.  A robust domestic green bond market can help achieve these goals.”

 

 

 

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