By Marina Grossi
Growing consumer awareness has led companies to constantly increase the degree of transparency of production processes. More and more people who buy a certain product want to know under what conditions it was produced, if it respected the rules of good environmental management, if it did not involve any action that violated principles of social justice, if the company has a positive image in terms of socio-environmental responsibility.
Despite the obvious differences, something similar has been happening in the world of corporate finance. Recently a group of investment managers, led by Climate Bonds Initiative and responsible for the allocation of around R$ 1.6 trillion issued statement in the sense of reaffirming its commitment that, in view of the present and future threats arising from the effects of climate change, it is urgent to structure, following the example of what already exists in other parts of the world, the Brazilian market of green bonds, or green bonds , in the English expression that still predominates.
This declaration was signed by some of the most important players in the financial market, such as BTG Pactual, BB DTVM, Itaú Asset Management, Santander Asset Management, Sul América Investimentos and UBS Brasil.
Green bonds are nothing more than bonds similar to any other type of debt but which, as a differentiating feature, carry an ecological mark as they are intended to finance activities that are proven to be relevant in the defense of environmental values. These are securities that require a high degree of transparency on the part of companies, as they are always subject to external evaluation.
These titles are still new around here, but they are already very successful in various parts of the world. To boost this market in the country, the Brazilian Business Council for Sustainable Development (CEBDS) and Febraban launched, in October last year, Guide for Issuing Green Bonds in Brazil.
The market potential for bonds like this in our country is extraordinarily large, either due to the gigantic size of the environmental assets that could be the object of actions backed by these bonds, or because there are several Brazilian companies that develop activities capable of earning the green label. , once they are well oriented on the mechanisms that regulate the activity.
Justine Leigh Bell da Climate Bonds Initiative estimates that for the current year of 2017 there is a potential of around R$ 16 billion in projects that can be financed under the green heading. Energy efficiency and forest management are examples of areas in which it has already been possible to carry out successful fundraising and with very high demand from investors.
Suzano Papel e Celulose, the first Brazilian company to unveil this field in the Brazilian market, issued US$ 500 million for papers focused on forest restoration, water management and renewable energy. It was such a success that demand outstripped supply by three times. There is a market eager to associate itself with well-structured initiatives, initiatives capable of generating returns not only in the financial dimension, but also in terms of credibility and image. BRF and Fibria were the other two Brazilian companies that have already issued these papers, but abroad, registering similar success.
The regulations specific to this market must exceed those that already, in such detail, regulate capital markets in general. Titles bearing the sustainability mark are depositories of hopes that must be fulfilled. Transparency and feasibility are key. Furthermore, it is necessary to take into account the national specificities and those of the various business segments.
In any case, what can be seen in the behavior demonstrated by the market, are very concrete perspectives that the resumption of investments and, consequently, of development in our country can occur incorporating the environmental dimension in a much more effective way than what occurred until the advent of of the crisis.
Text originally published on Project Collaborate on March 27th.
