São Paulo, February 17, 2021 - The Brazilian Federation of Banks (FEBRABAN) and the International Finance Corporation (IFC), a member of the World Bank Group, will work together to promote sustainable finance and further align the banking sector with the commitments assumed by Brazil in the Paris Agreement. These are some of the pillars of the memorandum of understanding signed by both entities for the development of a Sustainable Finance Program.
The partnership also stipulates the dissemination of good climate risk management practices in bank portfolios, in addition to training and fostering new businesses in energy efficiency, sustainable agriculture, distributed solar power, green buildings, and mobility, among other areas.
"We play a key role in channeling resources to projects and activities that contribute to sustainable development. We are engaged in the development and adoption of various measures to make economic activities more efficient, more resilient from the climate point of view, and aligned with the conservation of natural capital," says Isaac Sidney, the president of Febraban. "Businesses that embrace the conservation of natural resources as a premise and that aim for greater social well-being provide major opportunities for the sector," he adds.
"The partnership with FEBRABAN is a great opportunity to bring in knowledge about green finances, which are strategic for the country," says Carlos Leiria Pinto, the IFC's Country Manager in Brazil. "This joint work will allow the harmonizing of methodologies and sharing of tools that help banks increase their green portfolios, foster transparency in impact reports, and develop case studies that encourage the sector to move forward with green financing," he adds.
An IFC study shows that to fulfill the commitments agreed by the countries to fight climate change, green businesses will invest more than $ 23 trillion globally by 2030. In Latin America, the estimate is $ 2.6 trillion, based on a study of the region's four leading economies (Argentina, Brazil, Colombia, and Mexico). The most important sectors will be transport, green buildings, renewable energy, and energy efficiency. In Brazil, investment is estimated at $ 1.3 trillion by 2030.
FEBRABAN is part of the Sustainable Banking Network (SBN) and has led the roll-out in the region of voluntary and compulsory measures to foster sustainability in the sector. The SBN is a voluntary community including regulators and banking associations from emerging countries interested in promoting best international practices in sustainable finance, according to their specific characteristics, interests, and national priorities. Brazil is in the 'Advanced Implementation' stage of the SBN Global Progress Matrix, behind only China and Indonesia.
The collaboration between the two entities also stipulates the elaboration of joint researches and the implementation of projects with the potential to have a high impact and be replicable in the Brazilian market. These projects will focus on advancing sustainable finance and harmonizing bank practices with international trends, such as those regarding green taxonomy methodologies.
The green finance ecosystem will also be strengthened by events, seminars, and presentations on the topic in internal and external forums. The next steps for the partnership include the creation of a work plan, outlining the efforts to be made and the schedule of activities.
Green Banking Academy
In its Green Finance in Latin America report published in 2017, IFC analyzed the status of green finance in the banking sector and pointed out that the lack of knowledge and awareness in the market are among the main barriers to foster and drive sustainable finance. To address these challenges, at the 2018 FELABAN Annual Meeting, IFC launched the Green Banking Academy program, an initiative to accelerate the transformation to a green economy, strengthen this business in banks and contribute to a more sustainable world. In this program, IFC supports financial entities to develop, among other things, their green economy vision, medium- and long-term strategy, and their green products and services, to strengthen their commitments to fighting climate change.
The team works with local and international academia to provide knowledge and training that support the transformation to a financial system in line with the green economy. The program caters to employees' different levels and profiles in a financial institution, from the highest strategic level to implementation levels.
The banks' sustainability agenda
This agreement is in addition to the efforts that the Brazilian banking sector has been making in recent years in sustainability. Last December, the FEBRABAN Self-Regulation Council approved the review of self-regulatory commitments to manage social and environmental risks in financial institutions.
The update incorporated Environmental, Social and Corporate Governance (ESG) topics relevant to the banks' performance, based on the development of the sustainability agenda since the date the Standard was published, in 2014. One of the highlights is the new requirement for managing and reporting the risks and opportunities of climate change in the institutions' businesses.
FEBRABAN has been working for more than five years to measure financing by economic activity. The methodology was reviewed in 2020 and three profiling layers of credit flow analysis were implemented – the Green Economy, Exposure to Environmental Risk, and those with the greatest Exposure to Climate Change. Other FEBRABAN projects, publications, and initiatives in sustainability can be found at:https://portal.febraban.org.br/pagina/3059/37/pt-br/responsabilidade-socioambiental.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
About FEBRABAN
Febraban - the Brazilian Federation of Banks - is the main representative entity of the Brazilian banking sector. Founded in 1967, in the city of São Paulo, it is a non-profit association that is committed to strengthening the financial system and its relations with society and contributing to the country's economic, social and sustainable development. The entity's membership has 119 associated financial institutions, which represent 98% of total assets and 97% of the net worth of Brazilian banking institutions.
Stay Connected
www.ifc.org/lac
www.ifc.org/infrastructure
www.ifc.org/tmt
www.twitter.com/IFC_LAC
www.linkedin.com/company/ifc-américa-latina-y-el-caribe
www.facebook.com/IFCwbg
www.instagram.com/ifc_org/
www.youtube.com/IFCvideocasts
www.twitter.com/IFC_org
www.ifc.org/SocialMediaIndex
The partnership also stipulates the dissemination of good climate risk management practices in bank portfolios, in addition to training and fostering new businesses in energy efficiency, sustainable agriculture, distributed solar power, green buildings, and mobility, among other areas.
"We play a key role in channeling resources to projects and activities that contribute to sustainable development. We are engaged in the development and adoption of various measures to make economic activities more efficient, more resilient from the climate point of view, and aligned with the conservation of natural capital," says Isaac Sidney, the president of Febraban. "Businesses that embrace the conservation of natural resources as a premise and that aim for greater social well-being provide major opportunities for the sector," he adds.
"The partnership with FEBRABAN is a great opportunity to bring in knowledge about green finances, which are strategic for the country," says Carlos Leiria Pinto, the IFC's Country Manager in Brazil. "This joint work will allow the harmonizing of methodologies and sharing of tools that help banks increase their green portfolios, foster transparency in impact reports, and develop case studies that encourage the sector to move forward with green financing," he adds.
An IFC study shows that to fulfill the commitments agreed by the countries to fight climate change, green businesses will invest more than $ 23 trillion globally by 2030. In Latin America, the estimate is $ 2.6 trillion, based on a study of the region's four leading economies (Argentina, Brazil, Colombia, and Mexico). The most important sectors will be transport, green buildings, renewable energy, and energy efficiency. In Brazil, investment is estimated at $ 1.3 trillion by 2030.
FEBRABAN is part of the Sustainable Banking Network (SBN) and has led the roll-out in the region of voluntary and compulsory measures to foster sustainability in the sector. The SBN is a voluntary community including regulators and banking associations from emerging countries interested in promoting best international practices in sustainable finance, according to their specific characteristics, interests, and national priorities. Brazil is in the 'Advanced Implementation' stage of the SBN Global Progress Matrix, behind only China and Indonesia.
The collaboration between the two entities also stipulates the elaboration of joint researches and the implementation of projects with the potential to have a high impact and be replicable in the Brazilian market. These projects will focus on advancing sustainable finance and harmonizing bank practices with international trends, such as those regarding green taxonomy methodologies.
The green finance ecosystem will also be strengthened by events, seminars, and presentations on the topic in internal and external forums. The next steps for the partnership include the creation of a work plan, outlining the efforts to be made and the schedule of activities.
Green Banking Academy
In its Green Finance in Latin America report published in 2017, IFC analyzed the status of green finance in the banking sector and pointed out that the lack of knowledge and awareness in the market are among the main barriers to foster and drive sustainable finance. To address these challenges, at the 2018 FELABAN Annual Meeting, IFC launched the Green Banking Academy program, an initiative to accelerate the transformation to a green economy, strengthen this business in banks and contribute to a more sustainable world. In this program, IFC supports financial entities to develop, among other things, their green economy vision, medium- and long-term strategy, and their green products and services, to strengthen their commitments to fighting climate change.
The team works with local and international academia to provide knowledge and training that support the transformation to a financial system in line with the green economy. The program caters to employees' different levels and profiles in a financial institution, from the highest strategic level to implementation levels.
The banks' sustainability agenda
This agreement is in addition to the efforts that the Brazilian banking sector has been making in recent years in sustainability. Last December, the FEBRABAN Self-Regulation Council approved the review of self-regulatory commitments to manage social and environmental risks in financial institutions.
The update incorporated Environmental, Social and Corporate Governance (ESG) topics relevant to the banks' performance, based on the development of the sustainability agenda since the date the Standard was published, in 2014. One of the highlights is the new requirement for managing and reporting the risks and opportunities of climate change in the institutions' businesses.
FEBRABAN has been working for more than five years to measure financing by economic activity. The methodology was reviewed in 2020 and three profiling layers of credit flow analysis were implemented – the Green Economy, Exposure to Environmental Risk, and those with the greatest Exposure to Climate Change. Other FEBRABAN projects, publications, and initiatives in sustainability can be found at:https://portal.febraban.org.br/pagina/3059/37/pt-br/responsabilidade-socioambiental.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
About FEBRABAN
Febraban - the Brazilian Federation of Banks - is the main representative entity of the Brazilian banking sector. Founded in 1967, in the city of São Paulo, it is a non-profit association that is committed to strengthening the financial system and its relations with society and contributing to the country's economic, social and sustainable development. The entity's membership has 119 associated financial institutions, which represent 98% of total assets and 97% of the net worth of Brazilian banking institutions.
Stay Connected
www.ifc.org/lac
www.ifc.org/infrastructure
www.ifc.org/tmt
www.twitter.com/IFC_LAC
www.linkedin.com/company/ifc-américa-latina-y-el-caribe
www.facebook.com/IFCwbg
www.instagram.com/ifc_org/
www.youtube.com/IFCvideocasts
www.twitter.com/IFC_org
www.ifc.org/SocialMediaIndex
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