International investors meet to discuss green transition
Brazil Green Finance Initiative promotes conversation on definitions for credible transitions, ESG Portfolio and sustainable financing for Brazilian agriculture
What’s it all about?
Members of the Brazilian Green Finance Initiative (BGFI) gathered on June 17th to discuss issues related to the green transition. The study “Financing Credible Transitions” , launched by the Climate Bonds Initiative in 2020, was one of the main points addressed at the meeting, as well as reflections on the need for a clear definition for the ASG Portfolio.
The “Financing Credible Transitions” study results from a collaborative effort between Credit Suisse and CBI and establishes five principles for an ambitious transition. It presents a framework for defining credible transition paths for companies that will collectively reduce global emissions and meet Paris Agreement targets.
The meeting was attended by representatives of Zurich-Santander Seguros e Previdência SA, Siemens Financial Services, SulAmérica Investimentos, UBS, Zurich Insurance Company Ltd, Previ, AMEC, among others. Securitizadora Grupo Gaia joined as a special guest and shared their experience on issuing the world's first collective CRA Verde issue, CRA Tech.Verde.
The first meeting of the Agriculture Subcommittee covered the Sustainable Finance Market in Agro, the opportunities generated by FIAGRO and the green issuances in the agriculture and bioenergy sectors.
The results of the report “Brazil Briefing: Agriculture Sustainable Finance State of The Market'' published by the Climate Bonds Initiative (CBI) on May 24th were also presented at the meeting.
Who’s saying what?
Renato Barros – Agribusiness Leader, Gaia Agro Securitizadora
“CRA Verde.Tech was a milestone in the Agro world and in the capital market. It opens a door for producers who are already connected to ESG principles to access local and international investment funds.”
“It's a one-way street. More producers are interested in producing responsibly and that makes the market understand that an investment that is not positive for the environment makes no sense. We, from the Gaia Group, are here to encourage and support producers and investors, because the growth of agriculture will only be possible if it is increasingly sustainable.”
Guilherme Farah dos Santos – Head of Investments at Zurich in Brazil
“Zurich aims to be one of the most responsible and impactful companies in the world, which is why it puts the ESG concept into practice on several fronts. Our allocation to green bonds exceeds R$230 million, 7% of our total assets. We are proud to surpass a goal that was expected to be achieved in 2022 only.”
Danielle Brassel – Sustainable Investment Analyst, Zurich Insurance Company
“We believe that the positive environmental or social impact must be intentional. For us, green bonds fall into the impact investing category, and that's why a good part of our investments are connected with sustainable and social bonds.”
Marcelo Wagner – Investment Director, Previ
“I believe the green transition is vital, perhaps the most important mission of the century. PREVI participated in the construction of the Principles for Responsible Investment, and we have been very vocal over the past 20 years on this issue. We know that changing business conduct in relation to the environment is possible.”
Sylvia Coutinho – Head for Brazil, UBS Bank
“One of our missions is to promote the green capital market. In Brazil, we want to be the best in class, promoting this agenda and helping educate. We are especially focused on all parties involved in the agriculture and infrastructure sectors.”
Sean Kidney – CEO, Climate Bonds Initiative:
“We certainly see that green bonds are supplying demand in every market we look at around the world right now. What we see today in Brazil is also happening in Malaysia, Japan and other markets around the world, which is extraordinary. ”
The last word
The Climate Bonds Initiative will continue to support the development of the Brazilian green bond market, involving companies and parties interested in financing sustainable practices. In addition, we hope to help identify existing pipelines of green projects in order to connect this supply with local and international demand.
To know more
Financing Reliable Transitions: defines transition as a concept, presenting a starting point for the market to see a credible “brown to green” transition as ambitious, inclusive and in line with the Paris Agreement (thus avoiding greenwash). Furthermore, it presents a framework for using the transition label in practice and proposes clearly demarcated roles for a green label and a transition label.
The Brazil briefing on the Agriculture Sustainable Finance State of The Market provides an analysis of how labeled bonds are currently used to finance sustainable agriculture projects, assets and activities in the country. According to the study, green bonds account for 84% of the Brazilian sustainable debt market, with a cumulative total of USD 9 billion issued by February 2021.
The Unlocking Brazil’s Green Investment Potential for Agriculture identifies a large pipeline of projects and assets eligible for green financing. Designed to demonstrate how green finance can be directed to agriculture projects and assets at scale, and the technological advances made by the sector, the roadmap highlights a green pipeline for agriculture, livestock, renewable energy, forests and transport infrastructure so that issuers and investors can understand the opportunities that can be labeled or aggregated for attracting green capital.