Brazil's Banking Sector Embarks on Sustainable Finance Initiative with World Bank Affiliate

Strategic Insights -

The Brazilian Federation of Banks (FEBRABAN) and the International Finance Corporation (IFC), a member of the World Bank Group, have signed a memorandum of understanding to promote sustainable finance and align the country's banking sector with the Paris Agreement. The partnership aims to disseminate best practices in climate risk management, foster new businesses in sustainable sectors, and develop a Sustainable Finance Program. FEBRABAN President Isaac Sidney emphasized the sector's role in supporting sustainable development and promoting environmentally friendly economic activities.

Key Takeaways:

  • The partnership between FEBRABAN and IFC aims to promote sustainable finance and align the banking sector with the Paris Agreement.
  • The initiative will focus on disseminating good climate risk management practices, training, and fostering new businesses in sustainable sectors such as energy efficiency, sustainable agriculture, and green buildings.
  • The partnership also includes the development of a joint research program and the implementation of projects with a high impact and replicability potential.
  • The Brazilian banking sector has been working on sustainability, with FEBRABAN approving self-regulatory commitments to manage social and environmental risks in financial institutions, including a requirement for managing and reporting climate change risks.
  • The IFC estimates that green businesses will invest over $23 trillion globally by 2030, with Latin America expecting $2.6 trillion, and Brazil expected to invest $1.3 trillion in sustainable initiatives by 2030.
  • FEBRABAN is part of the Sustainable Banking Network (SBN), a voluntary community of regulators and banking associations in emerging countries promoting best international practices in sustainable finance.

Statistics:

  • $23 trillion: estimated global investment in green businesses by 2030 (IFC study)
  • $2.6 trillion: estimated investment in sustainable initiatives in Latin America by 2030 (IFC study)
  • $1.3 trillion: estimated investment in sustainable initiatives in Brazil by 2030 (IFC study)
  • 2030: target year for global green business investment
  • 2014: year the FEBRABAN Standard was published, guiding banks in managing social and environmental risks

Sources:

  • FEBRABAN
  • International Finance Corporation (IFC)
  • Sustainable Banking Network (SBN)
  • Euclid Infotech Pvt. Ltd.
  • Contify.com
  • FELABAN Annual Meeting (2018)