After our posts from recent initiatives from the European Central Bank and the United States Federal Reserve Board:
Today we post about the CVM and the Central Bank of Brazil (BACEN).
CVM Resolution 175 published on December 23, 2023 comes into force on April 3, 2023, with a deadline for adaptation of investment funds until December 31, 2024. Normative Annex I referring to FIFs Financial Investment Funds ( Shares, Foreign Exchange, Multimarket and Fixed Income) presents relevant innovations, such as the possibility of investing in environmental assets, including carbon credits (and in crypto assets).
Defining the legal nature of carbon credits was a pending issue in the Brazilian capital market. But, for those who expected an incentive for carbon credits of forest origin and others traded in the voluntary market, it was a disappointment. The CVM only defined credits registered in regulated carbon markets as financial assets, something that Brazil still does not have, because it has not created its regulated market. In practice, the rule will apply only to CBios.
The CBios are a kind of sectoral carbon credit provided for by the federal government's RenovaBio program, in which the issuers are biofuel producers and the buyers are mainly fuel distributors.
The Central Bank of Brazil published a report with actions related to the management of social, environmental and climate risks and opportunities, ESG. And based on the structure proposed by the World Economic Forum (WEF).
By the end of 2023, the following are expected:
deliveries by the Green Bureau of Rural Credit, involving the disclosure of social, environmental or climate benefits in rural credit operations and the improvement of control mechanisms using georeferencing tools
improvement of information disclosure by Financial Institutions, based on the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD)
estimates of the effects of socio-environmental risks on the economy
the reduction of the environmental impact in the processes of circulating media; and
the promotion of a culture of sustainability
In addition to everything that has already been done. Click on the image below to access the BACEN report.
