Context:
In order to achieve the Sustainable Development Goals and the climate and biodiversity protection targets of the United Nations, Brazil has to invest in an ecological and socially just economic transformation. The financial sector is important in this process: it can direct capital into environmentally friendly projects and thereby contribute to an ecological and socially sustainable economy. It also has to recognise and manage climate, environmental and social risks more effectively. Despite progress in the Brazilian financial system, there is still a lack of appropriate framework conditions for mobilising more private capital for sustainable investments. The Brazilian Sustainability Taxonomy is an important milestone. It defines criteria for sustainable economic and financial activities, providing companies and financial institutes with clear guidance. For it to become a uniform standard, Brazil must mainstream it in its political framework. In addition, practical instruments, incentives and reliable monitoring and control are required to implement the taxonomy effectively.
Objective:
The conditions for sustainable private investment in Brazil have improved.
Approach:
The project assists in creating conducive political and regulatory conditions for a sustainable financial sector in Brazil. - It advises the Ministry of Finance and the financial market regulators in developing the sustainable taxonomy, mainstreaming it in policy and establishing reliable reporting and verification systems for sustainable investment. - It develops and tests practical guidelines, training courses and approaches for companies and financial institutions to promote the introduction of the taxonomy into the market.- It provides technical support to the central bank, to incorporate the risks, impacts and opportunities of climate, environmental and social aspects more effectively in the financial system.