.Climate Finance.
.in Brazil:.
an overview of challenges
and opportunities
March 2023
This report aims to characterise Brazil in terms of challenges and opportunities to accelerate large-scale financing for the transition to a net-zero economy.
It adopts a broad (but non-exhaustive) approach to analyse public and private climate finance players and barriers within the Brazilian context. By doing so, NINT expects to provide relevant inputs to design initial aspects of Climate Arc’s strategy in Brazil.
The Institute for Climate and Society (iCS) and Climate Arc are working to launch a Brazilian platform that brings together and articulates Brazilian actors from the financial sector. To this end, they will hold a workshop in early March 2023, which will gather a relevant set of actors from Brazil’s National Financial System (SFN – Sistema Financeiro Nacional), both from the public and private sectors. Within this context, NINT was invited to contribute to this process through a report on Brazil’s current climate finance landscape.
The term “climate finance” is adopted to refer to financial flows toward the transition to a net-zero economy. This is a relevant delimitation, since the term can more broadly refers to financial flows “that seeks to support mitigation and adaptation actions that will address climate change”. In this sense, in order to summarise the report’s scope during its content, the term “climate finance” is adopted to refer only to mitigation actions, in particular related to a transition to net-zero.
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CONTENT
The content is structured in five chapters. The first one introduces the foundations for guiding climate finance in Brazil, including relevant national commitments, key sectors for a net-zero economy and priority policy agendas. A brief overview of SFN, including its structure and normative composition, is presented in chapter two. Chapter three offers a panoramic view of Brazil’s public resources operation and its possibilities to contribute to climate finance. It contains a brief description of Brazilian budgetary laws and procedures, as well as a state-of-the-art view in Development Financial Institutions (DFIs) and currently operating special legal funds.
Chapter four focuses on the state of private climate finance in Brazil. It approaches four groups of private financial institutions (banks, asset managers, asset owners and insurance companies) through seven lenses (key organisations, commitments, initiatives, key policies and regulation, disclosure level, advocacy and key challenges).
Additionally, chapter four also contains considerations regarding service providers and its climate-related aspects, including stock exchange, rating agencies and consulting firms.
Finally, chapter five presents a brief overview of existing blended finance initiatives in Brazil and identifies potential gaps and entry points for increasing climate finance through such mechanism.
This report was prepared by NINT – Natural Intelligence within the contract GCT001660 with iCS - Institute for Climate and Society. The views presented in this document do not constitute investment or divestment recommendations.
ABOUT NINT
We are the biggest Sustainable Finance consulting and research practice in Latin America and Caribbean
Inspired by the concept of natural intelligence, NINT puts the human and nature's intelligence in service of sustainability. We were born with 11 years of experience, more than 700 projects for more than 250 clients and a team of 100 people: the biggest ESG consulting and assessment in Latin America. In February 2023, we became an ERM Group company.