The guide, which sets out criteria to distinguish “green” activities from those that merely claim to be, could guide investment and accelerate the transition to a clean economy.
A sustainability has ceased to be an agenda for the future and has become an urgent need. At the heart of this transformation is the Brazilian Sustainable Taxonomy (TSB), a strategic instrument that can guide investments to accelerate the transition to a green and inclusive economy.
O Ministry of Finance, through the Sub-Secretariat for Sustainable Economic Development (SDES) of the Secretariat for Economic Policy (SPE), held a public consultation until March 31st to gather contributions to consolidate criteria that guide sustainable investments in the country.
The TSB is a guide that sets out clear criteria to distinguish “green” activities from those that merely claim to be. This is an essential step in combating “greenwashing” and ensuring that financial resources flow to projects and sectors that genuinely contribute to the country’s climate, environmental and social goals. Sustainable taxonomies have already been adopted by the European Union, China and Mexico, while other major economies, such as the UK and Canada, are in the process of finalising their systems.
But why is creating a sustainable taxonomy so important now? Because Brazil is facing a crucial decision-making moment. With a predominantly clean energy matrix and unparalleled biodiversity, the country is in a unique position to lead the global green transition. But its potential can only be realized with adequate structure and financing, and the taxonomy can be the foundation for building this path.
TSB does not operate in isolation. It is part of the federal government’s Ecological Transformation Plan, which was created to redefine the country’s economic and technological paradigms. This integration is essential for the taxonomy’s technical criteria to reflect national climate goals and to strengthen Brazil’s commitment to carbon neutrality by 2050.
By helping to direct financial resources towards “green” activities, the taxonomy delimits what is and what cannot be considered sustainable based on technical criteria, such as greenhouse gas emission limits, and socio-environmental criteria, such as not causing significant harm to the environment and populations. While some activities are considered obvious choices within sustainability, such as solar energyr, others may be challenged. Lithium mining, for example, may not seem sustainable at first glance, but it is an essential “bridging activity” for renewable energy storage and therefore also falls into the taxonomy.
Furthermore, the taxonomy offers clear benefits to companies and investors. By aligning with the TSB criteria, organizations’ activities can access green financing more easily, increase their attractiveness to sustainable funds, and reduce reputational risks associated with non-transparent practices. Compliance with the taxonomy also facilitates access to international markets, where environmental requirements are increasingly stringent.
The Brazilian Business Council for Sustainable Development (CEBDS) has been a leading player in sustainable finance. From publishing guides for green bonds in 2016 to participating in the Taxonomy Advisory Committee, we have contributed to ensuring that the regulatory framework is robust, reliable and aligned with the needs of the private sector and Brazilian society.
The taxonomy is the basis for a new economic paradigm that can place Brazil as a protagonist in the global green transition. At a time when the need for financing is essential for global goals, processes such as the Brazilian Sustainable Taxonomy reduce transaction risks, direct global financing and increase the attractiveness of our country to foreign investors.
