Brazil – SBFN Tool

SBFN Member Since:

2013

Member Organisations

Central Bank of Brazil

Brazilian Federation of Banks (FEBRABAN)

Download Country Progress Report

2019 Comparison

2021 Comparison

Progress Against sub Pillars

Framework Documents

Country	Policies/ Principles/ Guidelines	Year	Issuer
Brazil	Green Taxonomy	2021	FEBRABAN
Brazil	Explanatory Guide to FEBRABAN Green Taxonomy (Portuguese)	2021	FEBRABAN
Brazil	Public Consultation 86 New Regulation on Social, Environmental, and Climate-Related Risk Disclosures	2021	Central Bank of Brazil
Brazil	Mainstreaming Sustainability in Brazil’s Financial Sector	2020	Financial Innovation Laboratory (LAB)
Brazil	Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector	2019	FEBRABAN
Brazil	Normative SARB 014 for the Creation and Implementation of the Policy of Social and Environmental Responsibility	2014	Central Bank of Brazil
Brazil	Guidelines for issuing Green Bonds	2016	FEBRABAN
Brazil	Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions	2014	Central Bank of Brazil
Brazil	Framework for the Creation and Implementation of a Socio-environmental Responsibility Policy	2014	FEBRABAN
Brazil	Green Protocol	2008	FEBRABAN

Pillar 1 - ESG Integration - Strategic Alignment

National Framework

P 1.1 – Has the regulator or industry association published a national framework (“Framework”) for the banking sector that sets out expectations for integrating the consideration of environmental, social, and governance (ESG) risks and performance?

Yes

Source Reference Detail

(1) FEBRABAN updated its self-regulation on social and environmental management in FIs operations and activities (standard SARB 014). The standard was originally published in 2014 and has been updated in 2020. Document availabe in Portuguese only. http://cms.autorregulacaobancaria.com.br/Arquivos/documentos/PDF/Normativo%20SARB%20014%20-%20alterada%20pela%20Deliberacao%20031%20-%20sem%20marcas.pdf (2)The Brazilian Central Bank has launched the Sustainability dimension of its strategic agenda called BC#. A set of measures were defined for the next years, including new regulation on ESG risks.https://www.bcb.gov.br/en/pressdetail/2353/nota(3) Report “Mainstreaming Sustainability in Brazil´s Financial Sector – Policy Actions for a National supporitng framework” published in 2020. Authors include governmental and non-governmental organizations.http://www.labinovacaofinanceira.com/wp-content/uploads/2020/12/GIZ-Mainstreaming-sustainability-ENG-final.pdf

Source Reference Document

Normative SARB 014 for the Creation and Implementation of the Policy of Social and Environmental Responsibility (Central Bank of Brazil, 2014)

Source Reference Description

Normative SARB 014 for the Creation and Implementation of the Policy of Social and Environmental Responsibility (Central Bank of Brazil, 2014)

P 1.2 – Has the relevant regulator or industry association published a Framework for capital markets, investment, insurance or other non-lending FIs that sets out expectations for integrating the consideration of environmental, social, and governance (ESG) risks and performance?

Yes

Source Reference Detail

CVM, the Brazilian Secutirites and Exchange Commission, is proposing to chnage its Resolution 480 with the aim of, among other things, improve exisitng requirements on the provision of ESG information by listed companies. The prosoal is under Public Consultation. http://conteudo.cvm.gov.br/export/sites/cvm/audiencias_publicas/ap_sdm/anexos/2020/sdm0920edital.pdf The Brazilian stock exchange (B3) also encourages companies to report on their ESG practices and their contribution to the UN Sustainable Development Goals (SDGs).

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Pillar 1 - ESG Integration - Strategic Alignment

Alignment with International Goals & Standards

P 1.3 – Does the Framework make reference to international sustainable development frameworks or goals?

Yes

Source Reference Detail

Report “Mainstreaming Sustainability in Brazil´s Financial Sector – Policy Actions for a National supporitng framework” make reference to the UN SDGs and Paris Agreement.

Source Reference Document

Mainstreaming Sustainability in Brazil’s Financial Sector (LAB, 2020)

Source Reference Description

Mainstreaming Sustainability in Brazil’s Financial Sector (LAB, 2020)

P 1.4 – Does the Framework make reference to established international ESG risk management standards and principles for FIs??

Yes

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Pillar 1 - ESG Integration - Strategic Alignment

Alignment with national goals & strategies

P 1.5 – Does the Framework make reference to specific national development objectives, plans, policies, goals, or targets?

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–

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P 1.6 – Does any cooperation exist between agencies or between the regulator and industry association with respect to policy design and/or implementation related to ESG integration?

Yes

Source Reference Detail

There a multistakeholder initiative called LAB – Laboratory on Financial Innovation, led by the Brazilian Securities and Exchange Commision (CVM), the Brazilian Association of Development Institutions (ABDE), the InterAmerican Development Bank (IADB) and the GIZ (German cooperation agency). ESG integration is a central part of LAB´s discussions and government agencies (e.g. Central Bank of Brazil and the Ministry of Economics) and industry associations (e.g. FEBRABAN) are engaged in the initiative.http://www.labinovacaofinanceira.com/

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P 1.7 – Does any inter-agency data sharing currently exist related to ESG integration by FIs?

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–

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–

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Pillar 1 - ESG Integration - Regulatory and Industry Association Actions

Overall Approach & Strategy

P 1.8 – Does the Framework provide guidance on the role of the regulator or industry association with regard to assessing and managing ESG risk and performance in the financial sector?

Yes

Source Reference Detail

Yes, through the Sustainability dimension of the strategic agenda of the Central Bank of Brazil called BC# (as part of macro and microprudential assessment).https://www.bcb.gov.br/en/pressdetail/2353/notaThe Report “Mainstreaming Sustainability in Brazil´s Financial Sector – Policy Actions for a National supporitng framework” also provides guidance in the role of the regulator. http://www.labinovacaofinanceira.com/wp-content/uploads/2020/12/GIZ-Mainstreaming-sustainability-ENG-final.pdf

Source Reference Document

Mainstreaming Sustainability in Brazil’s Financial Sector (LAB, 2020)

Source Reference Description

Mainstreaming Sustainability in Brazil’s Financial Sector (LAB, 2020)

P 1.9 – Has the regulator or industry association undertaken market assessment to identify systemic ESG risks through analysis of the portfolios of supervised entities/members and published the results?

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–

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Pillar 1 - ESG Integration - Regulatory and Industry Association Actions

Technical Guidance

P 1.10 – Does the Framework provide technical guidance or tools to support implementation of ESG risk and performance management by the financial sector?

Yes

Source Reference Detail

FEBRABAN updated its self-regulation on social and environmental management in FIs operations and activities (standard SARB 014). The standard was originally published in 2014 and has been updated in 2020.Document availabe in Portuguese only. http://cms.autorregulacaobancaria.com.br/Arquivos/documentos/PDF/Normativo%20SARB%20014%20-%20alterada%20pela%20Deliberacao%20031%20-%20sem%20marcas.pdf FEBRABAN also developed training programs on sustainability and on climate-related risks and opportunities to its member banks in 2019 and 2020. It has also developed an ESG questionnaire to be used by banks as a reference on the topics they should take into account in due dilligence.

Source Reference Document

Normative SARB 014 for the Creation and Implementation of the Policy of Social and Environmental Responsibility (Central Bank of Brazil, 2014)

Source Reference Description

Normative SARB 014 for the Creation and Implementation of the Policy of Social and Environmental Responsibility (Central Bank of Brazil, 2014)

Pillar 1 - ESG Integration - Regulatory and Industry Association Actions

Supervisory Activities & incentives

P 1.11 – Is the implementation of the Framework regularly monitored and/or information regularly collected from FIs by the regulator and/or industry association?

Yes

Source Reference Detail

Compliance with the requirements of the self-regulation is monitored annualy by FEBRABAN.

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P 1.12 – Does the regulator or industry association provide any financial or non-financial incentives for FIs to manage ESG performance as part of the Framework?

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–

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–

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P 1.13 – Does the regulator or industry association apply any disincentives/penalties for non-compliance by FIs in terms of expectations from the regulator and/or industry association related to ESG risk management as part of the Framework?

Yes

Source Reference Detail

FIs that adhere to FEBRABAN´s self-regulation system and do not comply with the standard on social and environmental management (standard SARB 014) automatically looses the right to use the certificate. There is a standard setting out these rules (SARB 20/2018).http://cms.autorregulacaobancaria.com.br/Arquivos/documentos/PDF/Normativo%20Selo%20AR%20VF%20-%20alterado%20pela%20Delibera%C3%A7%C3%A3o%20CAR%20029-2020(1).pdf

Source Reference Document

Normative SARB 014 for the Creation and Implementation of the Policy of Social and Environmental Responsibility (Central Bank of Brazil, 2014)

Source Reference Description

Normative SARB 014 for the Creation and Implementation of the Policy of Social and Environmental Responsibility (Central Bank of Brazil, 2014)

Pillar 1 - ESG Integration - Regulatory and Industry Association Actions

Tracking & Aggregated Disclosure

P 1.14 – Has the regulator or industry association established a data collection approach and database to track or regularly publish data related to ESG integration by FIs as part of the Framework?

Yes

Source Reference Detail

Resolution 4327 (Banco Central do Brasil, 2014), Art.10

Source Reference Document

Framework for the Creation and Implementation of a Socio-environmental Responsibility Policy (FEBRABAN, 2014)

Source Reference Description

Framework for the Creation and Implementation of a Socio-environmental Responsibility Policy (FEBRABAN, 2014)

Pillar 1 - ESG Integration - Expectations of FI Actions

Strategy & Governance

P 1.15 – Does the Framework require/ask the FI’s board of directors (or highest governing body) to approve an ESRM and/or ESG integration strategy, and to supervise its implementation?

Yes

Source Reference Detail

Resolution 4327 (Banco Central do Brasil, 2014), Art.10

Source Reference Document

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

Source Reference Description

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

Pillar 1 - ESG Integration - Expectations of FI Actions

Organizational Structure & Capacity Building

P 1.16 – Does the Framework require/ask FIs to allocate resources/budget commensurate with portfolio ESG risks and define roles and responsibilities for ESG integration within the organization?

Yes

Source Reference Detail

Resolution 4327 (Banco Central do Brasil, 2014), Art. 3

Source Reference Document

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

Source Reference Description

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

P 1.17 – Does the Framework require/ask FIs to develop and maintain the ESG expertise and capacity of staff commensurate with portfolio ESG risks through regular training and learning?

Yes

Source Reference Detail

Resolution 4327 (Banco Central do Brasil, 2014), Art. 3.

Source Reference Document

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

Source Reference Description

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

P 1.18 – Does the Framework require/ask FIs to create incentives for managers to reduce the ESG risk-level of the portfolio over a specified timeframe?

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–

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–

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–

Pillar 1 - ESG Integration - Expectations of FI Actions

Policies & Procedures

P 1.19 – Does the Framework require/ask FIs to develop policies and procedures to identify, classify, measure, monitor, and manage ESG risks and performance throughout the financing cycle at the client level and/or the transaction/project level?

Yes

Source Reference Detail

Resolution 4327/2014 from the Central Bank of Brazil.FEBRABAN Stantard SARB 014/2014 (updated in 2020).

Source Reference Document

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

Source Reference Description

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

P 1.20 – Does the Framework require/ask FIs to undertake a regular review and monitoring of ESG risk exposure at aggregate portfolio level?

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–

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–

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–

P 1.21 – Does the Framework require/ask FIs to establish and maintain an external inquiry/complaints/grievance mechanism for interested and affected stakeholders in relation to ESG practices?

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–

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–

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–

Pillar 1 - ESG Integration - Expectations of FI Actions

Tracking, Reporting & Disclosure

P 1.22 – Does the Framework require/ask FIs to report ESG risks and performance to the regulator or industry association?

Yes

Source Reference Detail

FIs are required to report on compliance with Resolution 4327 to the Central Bank of Brazil. Details can be provided by the regulator.

Source Reference Document

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

Source Reference Description

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P 1.23 – Does the Framework require/ask FIs to report on ESG integration publicly?

Yes

Source Reference Detail

FEBRABAN standard SARB 14 requires FIs to publicly disclose their governance strucuture for ESG issues (Article 05).

Source Reference Document

Normative SARB 014 for the Creation and Implementation of the Policy of Social and Environmental Responsibility (Central Bank of Brazil, 2014)

Source Reference Description

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P 1.24 – Does the Framework require/ask FIs to track credit risk (e.g. loan defaults) and/or financial returns in relation to ESG risk level?

Yes

Source Reference Detail

Through Resolution 4327, FIs are required by the Central Bank of Brazil to track losses that may be related to social and environmental damage (e.g loan defaults as a result of environmental issues in the project being financed).FEBRABAN self regulation standard SARB 14 provide further guidance on how to track such risks.

Source Reference Document

Resolution No 4327 on Social and Environmental Responsibility for Financial Institutions (Central Bank of Brazil, 2014)

Source Reference Description

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Pillar 2 - Climate Risk Management - Strategic Alignment

National Framework

P 2.25 – Has the regulator or industry association published a national framework (“Framework”) for the banking sector that sets out expectations for integrating the consideration and management of climate risks and their impact in the national economy?

Yes

Source Reference Detail

In 2019 FEBRABAN lauched a Roadmap to assist the Brazilian Banks on the implementation of the Recomendations of the TCFD. Also, FEBRABAN´s self regulation on social and environmental risk management (standard SARB 14) was updated in 2020 and now sets out requirements on climate-related risks and opportunities.

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

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P 2.26 – Has the relevant regulator or industry association published a Framework for capital markets, investment, insurance or other non-lending FIs that sets out expectations for integrating the consideration and management of climate risks and their impact in the national economy?

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–

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–

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–

Pillar 2 - Climate Risk Management - Strategic Alignment

Alignment with International Goals & Standards

P 2.27 – Does the Framework make reference to international agreements or frameworks to address climate?

Yes

Source Reference Detail

Bank of Brazil’s Banco do Brasil’s Climate Change (2019): Reference to Paris Agreement (Page 2), and Sustainable Development Goals (Page 4). h Bank of Brazil regulations in public consultation for supervision of environmental, social and climate related risks (PC85 and PC86): Refernece to Paris Agreement in the Introduction (Page 4). PC85:

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P 2.28 – Does the Framework recognize or align with established regional or international good practice for climate risk management and disclosure by FIs?

Yes

Source Reference Detail

FEBRABAN´s Roadmap is directed to support the Brazilian Banks to align their practices to the TCFD recomendations.

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

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Pillar 2 - Climate Risk Management - Strategic Alignment

Alignment with National Goals & Strategies

P 2.29 – Has the regulator or industry association aligned the Framework with national goals to address climate change in line with the country’s Nationally Determined Contributions (NDCs) to the Paris Agreement?

Yes

Source Reference Detail

Bank of Brazil’s Banco do Brasil’s Climate Change (2019): Reference to Nationally Determined Contributions (NDCs) Introduction, Page 4.

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P 2.30 – Does any cooperation exist between agencies, or between government and industry association, with respect to policy design or implementation related to climate risk management?

Yes

Source Reference Detail

FEBRABAN periodically presents to the Central Bank of Brazil the status of the implementation of its Roadmap to implement the TCFD recommendations in the banking industry.Cooperation also exists in the financial industry (banking, insurance, capital markets and pension funds) through their trade associations – Intra-sector Commitee on Sustainabiity. There is also a multistakeholder initiative called LAB – Laboratory on Financial Innovation, led by the Brazilian Securities and Exchange Commision (CVM), the Brazilian Association of Development Institutions (ABDE), the InterAmerican Development Bank (IADB) and the GIZ (German cooperation agency). Climate-related issues are a central part of LAB´s discussions and government agencies (e.g. Central Bank of Brazil and the Ministry of Economics) are engaged in the initiative.

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

P 2.31 – Does any inter-agency data sharing currently exist related to climate risk management by FIs?

Yes

Source Reference Detail

Public Consultation 86 New Regulation on Social, Environmental, and Climate-Related Risk Disclosures (Central Bank of Brazil, 2021)

Source Reference Document

Public Consultation 86 New Regulation on Social, Environmental, and Climate-Related Risk Disclosures (Central Bank of Brazil, 2021)

Source Reference Description

Public Consultation 86 New Regulation on Social, Environmental, and Climate-Related Risk Disclosures (Central Bank of Brazil, 2021)

Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions

Overall Approach & Strategy

P 2.32 – Has the regulator or industry association undertaken research on historical impacts to the economy and financial sector from climate change, and/or future expected impacts resulting from physical and transition climate risks?

Yes

Source Reference Detail

FEBRABAN is currently undertaking 2 climate scenario studies (one on physcial and the other on transition risks) in partnership with academic institutions and consultancy companies so that banks can analyse and measure the potential impact of climate change in their portfolios. The studies are part of FEBRABAN´s Roadmap to Implement the TCFD recommendations in the Brazilian Banking Industry.

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

P 2.33 -Does the Framework identify key sources of GHG emissions – such as in particular sectors – as priorities in the proactive management of climate risks by the financial sector?

Yes

Source Reference Detail

FEBRABAN developed a Guide on Mesurement of Financed Emissions, both those generated by banks’ administrative activities and by their opertions (e.g. loans).In this Guide, the practices of national banks were evaluated and international measurement methodologies were presented;. The final document is currently under review and will be soon available at the Sustainability Studies Page, at FEBRABAN´s Website

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P 2.34 – Does the Framework incorporate the conservation/restoration of natural carbon sinks (such as oceans, forests, mangroves, grasslands, and soils) as an important part of reducing climate change risks? (e.g., through guidelines, scenario analysis, targets, or incentives for FIs)

Yes

Source Reference Detail

Roadmap Progress Report 2020 – The implementation of TCFD recommendations by the Brazilian banking sector (FEBRABAN, 2020)

Source Reference Document

Roadmap Progress Report 2020 – The implementation of TCFD recommendations by the Brazilian banking sector (FEBRABAN, 2020)

Source Reference Description

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P 2.35 – Has the regulator or industry association developed an internal strategy to address climate risk, and/or embedded climate risk management into its governance, organizational structures, and budget as part of the Framework?

Yes

Source Reference Detail

FEBRABAN approved in 2020 its internal Sustainability Policy and climate issues are taken into account. The document is not yet avaliable to the public. In 2019 FEBRABAN lauched a Roadmap to assist the Brasilian Banks on the implementation of the Recomendations of the TCFD.

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

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P 2.36 – Has the regulator or industry association undertaken any activities to expand and deepen analytical understanding of national and/or cross-border physical and transition climate risks, and to raise awareness as to how these risks may transmit to, and impact, the financial sector?

Yes

Source Reference Detail

FEBRABAN is currently undertaking 2 studies to “Tropicalize” Climate Scenarios (both physical and transition) to Brazilian context for the use of the banks to analyse and measure their climate risks.

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Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions

Technical Guidance

P 2.37 – Has the regulator or industry association developed risk assessment approaches, methodologies, or tools to understand and assess the financial sector’s exposure to climate risk as part of the Framework?

Yes

Source Reference Detail

As previously mentioned, FEBRABAN is currently undertaking 2 studies to “Tropicalize” Climate Scenarios (both physical and transition) to Brazilian context for the use of the banks to analyse and measure their climate risks.FEBRABAN also mapped existing tools that can be used by banks to assess their clients and operations climate risks. These Guidelined are available at FEBRABAN´s website. https://cmsportal.febraban.org.br/Arquivos/documentos/PDF/Riscos%20climaticos.pdfFinally, FEBRABAN has developed a taxonomy to identify activities that are more exposed to cliamte risks according to the TCFD.

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Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions

Supervisory Activities & Incentives

P 2.38 – As part of the Framework, has the regulator clarified supervisory expectations with regard to climate risk management by FIs, including consideration of international good practices?

Yes

Source Reference Detail

In September 2020, the BCB launched the BC # Sustainability agenda, which brings a series of important measures for the management of socio-environmental and climatic risks to the national financial system.Among the announced supervision measures is the expansion of the collection of qualitative data from financial institutions on socio-environmental risks and ‘climate risk assessment’ based on criteria for allocation to sensitive segments, value, purpose and / or situation. The measure will make it possible to systematize the sharing and crossing of information on the socio-environmental situation of the institutions and their crossing with public data. The database will also allow for greater accuracy in conducting stress tests that will include climate risk scenarios. Available at:https://www.bcb.gov.br/en/financialstability/sustainability

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P 2.39 – Has the regulator started to explicitly embed climate-related risk in supervisory activities and review processes as part of the Framework?

Yes

Source Reference Detail

–

Source Reference Document

Public Consultation 86 New Regulation on Social, Environmental, and Climate-Related Risk Disclosures (Central Bank of Brazil, 2021)

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P 2.40 – Has the regulator started to explicitly embed climate-related risk in supervisory activities and review processes as part of the Framework?

Yes

Source Reference Detail

Since the publication of its Roadmap to implement TCFD recommendations, FEBRABAN is monitoring the actions taken by its member banks and disclosing the consolidated results annualy in a status report.The one from 2020 is being finalized.

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

P 2.41 – Has the regulator started to explicitly embed climate-related risk in supervisory activities and review processes as part of the Framework?

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–

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Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions

Tracking & Aggregated Disclosure

P 2.42 – Does the regulator or industry association regularly collect and/or report market-level and/or FI-level data on climate-related financial sector risks as part of the Framework?

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Pillar 2 - Climate Risk Management - Expectations of FI Actions

Strategy & Governance

P 2.43 – Does the Framework require/ask FIs to establish a strategy for climate risk management with responsibility at the board of director level (or highest governing body)?

Yes

Source Reference Detail

Although not required, it is recommended in FEBRABAN´s Roadmap. In 2019 FEBRABAN lauched a Roadmap to assist the Brasilian Banks on the implementation of the Recomendations of the TCFD. Available at: https://cmsportal.febraban.org.br/Arquivos/documentos/PDF/Implementing%20the%20TCFD_f.pdf

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Pillar 2 - Climate Risk Management - Expectations of FI Actions

Organizational Structure & Capacity Building

P 2.44 – Does the Framework require/ask FIs to define the roles and responsibilities and related capacities of the FI’s senior management and operational staff in identifying, assessing, and managing climate-related financial risks and opportunities?

Yes

Source Reference Detail

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Pillar 2 - Climate Risk Management - Expectations of FI Actions

Policies & Procedures

P 2.45 – Does the Framework require/ask FIs to expand existing risk management processes to identify, measure, monitor, and manage/mitigate financial risks from climate change?

Yes

Source Reference Detail

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions

Tracking, reporting & disclosure

P 2.46 – Does the Framework require/ask FIs to report on their overall approaches to climate risk management in line with international good practices (e.g., TCFD), or establish a timeline by which FIs should begin to align their reporting with such practices?

Yes

Source Reference Detail

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

P 2.47 – Does the Framework require/ask FIs to identify, measure, and report on exposure to sectors which are vulnerable to transition risk and physical risk?

Yes

Source Reference Detail

In 2019 FEBRABAN lauched a Roadmap to assist the Brasilian Banks on the implementation of the Recomendations of the TCFD. Available at: https://cmsportal.febraban.org.br/Arquivos/documentos/PDF/Implementing%20the%20TCFD_f.pdfFEBRABAN has developed a taxonomy to identify activities that are more exposed to cliamte risks according to the TCFD.

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

P 2.48 – Does the Framework require/ask FIs to adopt and report on performance targets to reduce portfolio greenhouse gas (GHG) emissions on a regular basis?

Yes

Source Reference Detail

In 2019 FEBRABAN lauched a Roadmap to assist the Brasilian Banks on the implementation of the Recomendations of the TCFD. Available at: https://cmsportal.febraban.org.br/Arquivos/documentos/PDF/Roadmap%20FEBRABAN%20para%20implementa%C3%A7%C3%A3o%20da%20TCFD-FSB%20-%20FINAL.pdfAs part of the Roadmap implementation, FEBRABAN developed a Guide on Mesurement of Financed Emissions, both those generated by banks’ administrative activities and by their opertions (e.g. loans).In this Guide, the practices of national banks were evaluated and international measurement methodologies were presented;. The final document is currently under review and will be soon available at the Sustainability Studies Page, at FEBRABAN´s Website

Source Reference Document

Implementing the TCFD Recommendations – A Roadmap for the Brazilian Banking Sector (FEBRABAN, 2019)

Source Reference Description

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P 2.49 – Does the Framework require/ask FIs to adopt and report on performance targets to reduce exposure to climate change risks at the portfolio level on a regular basis?

Source Reference Detail

–

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Pillar 3 - Financing Sustainability - Strategic Alignment

National Framework

P 3.50 – Has the regulator or industry association published a national framework (“Framework”) for the banking sector that sets out expectations for integrating the consideration of instruments, goals, and standards for financing sustainability, including requirements for ensuring credibility and managing and measuring resulting impacts in the national economy?

Yes

Source Reference Detail

In September 2020, the Brazilian Central Bank launched the BC# Sustainability agenda, announcing new topics to be included at regulations, such as climate risks (and TCFD recomendations), updating on the 4327 Resolution on socio envioronmental risk management with a more integrated approach with other types of financial risks and the creation of a “Green Bureau for Rural Credit” on an Open Banking Model, among other actions. All of them are having their schedule and action plan detailed and will be released by the Central Bank along 2021 to 2023. Available at https://www.bcb.gov.br/conteudo/home-ptbr/TextosApresentacoes/Agenda_Sustentabilidade_8.9.20.pdf FEBRABAN also promoted a Public consultation in 2020 to review its methodology of green taxonomy for banking, applied since 2015 to measure financial flows to the green economy. The results and details of the new method are availabel at: https://portal.febraban.org.br/pagina/3292/1103/pt-br/consulta-publica

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P 3.51 – Has the relevant regulator or industry association published a Framework for capital markets, investment, insurance or other non-lending FIs that sets out expectations for integrating the consideration of instruments, goals, and standards for financing sustainability, including requirements for ensuring credibility and managing and measuring resulting impacts in the national economy

Yes

Source Reference Detail

The “Mainstreaming Sustainability in Brazil´s Financial Sector – Policy Actions for a National supporting framework” convers non-banking as well. Brazil also has a green bond guidelines.

Source Reference Document

Mainstreaming Sustainability in Brazil’s Financial Sector (LAB, 2020)

Source Reference Description

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Pillar 3 - Financing Sustainability - Strategic Alignment

Alignment with International Goals & Standards

P 3.52 – Has the regulator or industry association developed a strategy, regulations, or set of frameworks for stimulating the allocation of capital to sustainable assets, projects, and related sectors in line with global goals, such as the Sustainable Development Goals (SDGs)?

Yes

Source Reference Detail

The “Mainstreaming Sustainability in Brazil´s Financial Sector – Policy Actions for a National supporting framework” does mention the Sustainable Development Goals (SDGs).

Source Reference Document

Mainstreaming Sustainability in Brazil’s Financial Sector (LAB, 2020)

Source Reference Description

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P 3.53 – Does the Framework recognize and/or align with existing standards, voluntary principles, or market good practices related to sustainable finance instruments?

Yes

Source Reference Detail

The BC# Sustainability Agenda formally estabilishes a collaboration through an MoU with CBI (Climate Bonds Initiative), and the entrance of BCB at the NGFS group, alinging the discussions of the regulator with the some of the international standards mentioned such as the Taxonomy Initiatives, Green Bonds issues, etc. FEBRABAN also promoted an Public consultation in 2020 to review its methodology of green taxonomy for banking, applied since 2015 to measure financial flows to the green economy. The new version of the taxonomy takes into account international references such as the CBI standards, Green Bond Principles and Social Bond Principles. The results and details of the new method are availabel at: https://portal.febraban.org.br/pagina/3292/1103/pt-br/consulta-publica

Source Reference Document

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Source Reference Description

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Pillar 3 - Financing Sustainability - Regulatory and Industry Association Actions

Alignment with national goals & strategies

P 3.54 – Does the Framework enable the achievement of stated national objectives by guiding capital to sectors, assets, and projects that have environmental and social benefits in line with national sustainable development priorities, strategies, targets, and the size of sustainable investment needs, and taking into account the local barriers to scaling-up sustainable finance?

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P 3.55 – Does the Framework enable the achievement of stated national objectives by guiding capital to sectors, assets, and projects that have environmental and social benefits in line with national sustainable development priorities, strategies, targets, and the size of sustainable investment needs, and taking into account the local barriers to scaling-up sustainable finance?

Yes

Source Reference Detail

FEBRABAN hosts, since 2015, an Intrasectorial Commitee to discuss Sustainability topics, strategies, urgencies and advances across the Brazilian Financial Ecossystem with the participation of associations representindg the banking industry, capital markets, insurance and pension funds.Brazil also established a bilateral cooperation with the German Government (led by GIZ) to promote Sustainble Finance in Brazil thourgh the FiBras Project. The Brazilian Ministry of Economics and the Central Bank of brazil are leading the initiative on the Brazilian side.

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P 3.56 – Does any inter-agency data sharing currently exist related to stimulating and monitoring sustainable finance flows?

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Pillar 3 - Financing Sustainability - Strategic Alignment

Overall Approach & Strategy

P 3.57 – Does the Framework require/ask the regulator or industry association to establish mechanisms to identify and encourage the allocation of capital to sustainable sectors, assets, and projects?

Yes

Source Reference Detail

The BC# Sustentability agenda will create formal mechanisms specifically to the allocation of capital to Agriculture through the Green Bureau.Through FEBRABAN´s green taxonomy, the banks are also encouraged to identify the allocation of capital to sustainable sectors.

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Pillar 3 - Financing Sustainability - Regulatory and Industry Association Actions

Technical Guidance

P 3.58 – Does the Framework require/ask the regulator or industry association to establish mechanisms to identify and encourage the allocation of capital to sustainable sectors, assets, and projects?

Yes

Source Reference Detail

Guidelines for Issuing Green Bonds in Brazil (FEBRABAN and CEBDS, 2016), Page 15 – Table II &Page 36 to 41FEBRABAN also promoted an Public consultation in 2020 to review its methodology of green taxonomy for banking, applied since 2015 to measure financial flows to the green economy. The results and details of the new method are available at: https://portal.febraban.org.br/pagina/3292/1103/pt-br/consulta-publica

Source Reference Document

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

Source Reference Description

Refer to Description

P 3.59 – Does the Framework provide guidelines for extending green, social or sustainability-focused loans (excluding bonds)?

Yes

Source Reference Detail

Guidelines for Issuing Green Bonds in Brazil (FEBRABAN and CEBDS, 2016).https://cmsportal.febraban.org.br/Arquivos/documentos/PDF/Guia_emissa%CC%83o_ti%CC%81tulos_verdes_ING.pdfFEBRABAN´s green taxonomy (2020) takes into account green and social activities. Final version to the published in portuguese.https://portal.febraban.org.br/pagina/3292/1103/pt-br/consulta-publica

Source Reference Document

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

Source Reference Description

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

P 3.60 – Does the Framework provide guidelines for issuance of green, social or sustainability bonds?

Yes

Source Reference Detail

Guidelines for Issuing Green Bonds in Brazil (FEBRABAN and CEBDS, 2016), Introduction, and Page 44 – 5.2.

Source Reference Document

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

Source Reference Description

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

P 3.61 – Does the Framework require/ask for external party verification to ensure the credibility of sustainability instruments?

Yes

Source Reference Detail

Guidelines for Issuing Green Bonds in Brazil (FEBRABAN and CEBDS, 2016), Introduction, and Page 44 – 5.2.

Source Reference Document

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

Source Reference Description

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

Pillar 3 - Financing Sustainability - Regulatory and Industry Association Actions -

Supervisory activities & incentives

P 3.62 – Does the regulator or industry association monitor information reported by FIs related to green/social/sustainability investment, lending, and other instruments to prevent greenwashing and social-washing?

Yes

Source Reference Detail

Reference: Pg 36 and 37 of Mainstreaming Sustainability in Brazil´s Financial Sector – Policy Actions for a National supporitng framework every year since 2015, FEBRABAN has collected data on the financial resources allocated by banks to the green economy, and to sectors with high potential for environmental degradation.

Source Reference Document

Mainstreaming Sustainability in Brazil’s Financial Sector (LAB, 2020)

Source Reference Description

Mainstreaming Sustainability in Brazil’s Financial Sector (LAB, 2020)

P 3.63 – Are there any financial or non-financial incentives for FIs to develop and grow green, social, or sustainability finance instruments?

Yes

Source Reference Detail

There is a fiscal incentive for the issuance of a green/social debt instrument called “debêntures incentivadas” if they are related to infrascruture project from certain sectors of the economy. Decree 10.387, available at: https://www2.camara.leg.br/legin/fed/decret/2020/decreto-10387-5-junho-2020-790284-norma-pe.html

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Pillar 3 - Financing Sustainability - Regulatory and Industry Association Actions -

Tracking & Aggregated Disclosure

P 3.64 – Does the regulator or industry association collect and/or publish data from FIs or other sources about allocation of capital to green/social/sustainability assets, projects, or sectors?

Yes

Source Reference Detail

Since 2015 FEBRABAN collects annualy the allocation of loans to green sectors. This is done through its green taxonomy. The green taxonomy was revised in 2020 and updated results for the Brazilian Banking Industry are about to be published. Currently data is colected through a collaboration with the Central Bank of Brazil.

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Pillar 3 - Financing Sustainability - Expectations of FI Actions

Strategy & Governance

P 3.65 – Does the Framework require/ask FIs to establish a strategy, governance, or high-level targets, including at the Board of Directors level, for capital allocation to sustainable assets, projects, or sectors?

Source Reference Detail

–

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Pillar 3 - Financing Sustainability - Expectations of FI Actions

Organizational Structure & Capacity Building

P 3.66 – Does the Framework require/ask FIs to define internal staff roles and responsibilities to encourage finance flows to green, social, and/or sustainability-focused investments?

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–

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P 3.67 – Does the Framework require/ask FIs to develop and maintain internal staff capacity on green, social, or sustainability products through regular training and learning?

Source Reference Detail

–

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Pillar 3 - Financing Sustainability - Expectations of FI Actions

Policies & Procedures

P 3.68 – Does the Framework require/ask FIs to put in place policies and procedures for defining, issuing, managing proceeds, tracking performance, and reporting on green, social or sustainability-focused products?

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P 3.69 – Does the Framework require/ask FIs to appoint an independent external reviewer to confirm that the FI’s internal framework meets the requirements of the recognized national framework and regulations, or aligns to international standards?

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P 3.70 – Does the Framework require/ask that FIs create incentives for managers to increase sustainable loans or investments in the portfolio?

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Source Reference Document

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Pillar 3 - Financing Sustainability - Expectations of FI Actions

Tracking, reporting & disclosure

P 3.71 – Does the Framework require/ask FIs to publish annual updates on the performance and impacts of the sustainability instruments in compliance with relevant national and/or international standards?

Yes

Source Reference Detail

The 2016 FEBRABAN green bond guidelines have good reporting requirements for green bond issuers.There are other important information and guides publications on LAB´s website as well.

Source Reference Document

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

Source Reference Description

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P 3.72 – Does the Framework require/ask FIs to obtain and disclose independent review of metrics reported annually in relation to the social and environmental outcomes and impacts achieved through the sustainability instruments?

Source Reference Detail

–

Source Reference Document

Public Consultation 86 New Regulation on Social, Environmental, and Climate-Related Risk Disclosures (Central Bank of Brazil, 2021)

Source Reference Description

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P 3.73 – Does the Framework require/ask FIs to obtain and disclose independent review of metrics reported annually in relation to the social and environmental outcomes and impacts achieved through the sustainability instruments?

Source Reference Detail

–

Source Reference Document

–

Source Reference Description

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P 3.74 – Does the Framework require/ask FIs to report to the regulator(s) or industry association(s) on green, social, and/or sustainability bonds or other positive impact investments?

Yes

Source Reference Detail

Guidelines for Issuing Green Bonds in Brazil (FEBRABAN and CEBDS, 2016), introduction, and Page 44 – 5.2.

Source Reference Document

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

Source Reference Description

Page 44 – 5.2

P 3.75 – Does the Framework require/ask FIs to report publicly on their green, social and sustainability-focused finance activities and positive outcomes or impacts (i.e. not only to the regulator or shareholders)?

Yes

Source Reference Detail

Guidelines for Issuing Green Bonds in Brazil (FEBRABAN and CEBDS, 2016), introduction, and Page 44 – 5.2.

Source Reference Document

Guidelines for issuing Green Bonds (FEBRABAN, 2016)

Source Reference Description

Page 44 – 5.2

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