Nov 16, 2020

 Representing the Brazilian Development Bank (BNDES), president Gustavo Montezano signed on November 16 the Declaration on Responsible Investment Principles drafted by Brics, a group formed by five developing countries including Brazil, Russia, India, China and South Africa. This initiative seeks to develop and consolidate a set of common principles to guide responsible financing, focusing on rigorous social and environmental and governance standards, as well as those on integrity and good market actions. The document was signed during the 12th Brics Summit, currently being held in Russia but with the online presence of the other members.

Among the principles declared are the integrated evaluation of economic, social and environmental aspects of financing procedures and the joint development of new products and services that support the transition into inclusive economies and sustainable finances, including green financing. Development Finance Institutions (DFI) also committed themselves to respecting human rights and encouraging their clients to engage in business that are friendly towards the environment, promoting investments on natural capital and contributing to the implementation of deals signed by the countries. The declaration also mentions innovative and digital solutions to enable the inclusive growth of local communities.

“The world is changing, and so are social and environmental demands, and for this reason DFIs must adapt, and quickly. This is very positive. These changes are an incentive for banks, companies and private agents to consider the social and environmental benefits of their actions, and our role as FDIs of BRICS is to guide them, work with them, so new instruments and products can be created for this new market,” said Montezano during the event. About cooperation, he added: “As development banks from developing countries, from countries that face different realities from those of developed countries, we must be close to each other so we can spearhead the ESG agenda and encourage the participation of private capital in projects of great relevance to our countries. BNDES considers the recently declared Principles of Responsible Investment a fundamental cooperation initiative by BRICS.”

Like BNDES, the other DFIs of each of the countries - State Development Corporation (VEB.FR, Russia), Export-Import Bank of India (Exim Bank), China Development Bank (CDB) and the Development Bank of Southern Africa (DBSA) – also signed the declaration at the 12th BRICS Summit. At the Summit, the DFIs seek to advance the cooperation targets that have already been established, especially those related to the mobilization of private investments for the development of infrastructure projects in the participating countries.

“The adhesion to the BRICS Responsible Investment Principles, which were built with a focus on development banks and their particularities when acting, represents the consolidation of practices that BNDES already adopts in our work, reinforcing the Bank’s position as one of the main actors in Brazil when it comes to social and environmental matters at international markets.”, said Bianca Nasser, Director of BNDES’s Financial Division.

BRICS – Brics is the acronym for the association between Brazil, Russia, India, China and South Africa, countries that share a common characteristic, being developing economies that seek to expand their influence on regional and global matters through coordinated action, in sectors like trade, investments, health, technology and infrastructure. Still without the participation of South Africa – they would only join the group in 2011 –, their first Summit took place in Russia, in 2009, when these countries discussed not only the ongoing global financial crisis and mitigation actions, but the possibilities of cooperating in energy and environmental matters and in technological innovation. The Summit has been held eleven times since 2009, three of which took place in Brazil. Several cooperation agreements have been signed, covering multiple topics of shared interest, such as the co-funding of projects, training of personnel and innovation.

The BRICS responsible investment principles and BNDES’s Social and Environmental Agenda – BNDES has a long history of actions towards responsible investment. The Bank’s first Environmental Policy was published in 1999, establishing guidelines for actions aligned with the concept of sustainable development, as well as procedures and conditions that required environmental targets to receive financing. This policy was replaced by a Social and Environmental Policy in 2010, receiving further complements from the publication of the first version of BNDES’s Corporate Social and Environmental Responsibility Policy (PRSA), which covered the strategic action of BNDES to promote sustainability.

From the point of view of products and services related to sustainable finances, BNDES provides special conditions for investments that help in the transition towards a low-carbon economy. Moreover, BNDES was the first Brazilian financial institution to emit Green Bonds in the international market, valued at R$ 1 billion and with R$ 5 billion demand. In October 2020 BNDES innovated again, emitting R$ 1 billion in Green Credit Letters for the domestic market.

Considering its Triennial Plan, the aspects related to social and environmental responsibility and the deliveries to society by BNDES are aligned with the Sustainable Development Goals. Such deliveries are also committed to the concept of responsible investment, targeting projects on sanitation, urban mobility, renewable energies, health, among others.