{"id":23020,"date":"2018-01-16T17:25:04","date_gmt":"2018-01-16T17:25:04","guid":{"rendered":"https:\/\/cebds.org\/noticia\/o-que-sao-financas-sustentaveis-e-titulos-verdes\/"},"modified":"2023-06-23T14:14:27","modified_gmt":"2023-06-23T14:14:27","slug":"o-que-sao-financas-sustentaveis-e-titulos-verdes","status":"publish","type":"noticia","link":"https:\/\/cebds.org\/en\/noticia\/o-que-sao-financas-sustentaveis-e-titulos-verdes\/","title":{"rendered":"What are Sustainable Finance and Green Bonds"},"content":{"rendered":"

Did you know that the financial system also plays a role in preserving the environment?<\/span><\/h3>\n

Financial institutions play a fundamental role in building sustainable development. Through the <\/span>sustainable finance<\/b>, financial system agents can largely contribute to a better future for everyone.<\/span><\/p>\n

Read this other article about sustainability on our blog.<\/span><\/a><\/p>\n

Sustainable finance is already a demand from society for banks to use resources obtained through financing and credit securities in<\/span> socio-environmental initiatives<\/b>.<\/span><\/p>\n

In this text, you will learn more about sustainable finance. And how they can still change the financial system once and for all.<\/span><\/p>\n

If you have any questions, write a comment at the bottom of the page.<\/b><\/p>\n

Good reading!<\/span><\/p>\n

What are sustainable finances<\/span><\/h2>\n

They represent a change of mindset for capital managers.<\/span><\/i><\/p>\n

Imagine a world where banks have real socio-environmental awareness, where all their fiduciary power and capital allocation were used only in environmentally responsible companies and projects.<\/span><\/p>\n

The impacts on the environment and society would certainly be much smaller.<\/span><\/p>\n

There are those who believe that this is impossible: combining capital with the preservation of nature. However, several companies are committed to this mission and have already found a way to produce and generate capital without compromising the environment.<\/span><\/p>\n

One proof of this is the <\/span>Paris Agreement<\/span><\/a> which stipulates a goal to control the increase in Earth's temperature. Several Brazilian companies have worked to achieve these objectives, establishing and following <\/span>science-based goals<\/span><\/a>.<\/span><\/p>\n

However, corporations alone are not enough. There must be a great collective effort from all agents in the economy: government, banks, financial institutions, investors and ordinary citizens.<\/span><\/p>\n

For this reason, financial institutions came under pressure from civil society, which organized massive campaigns in the 90s on creditor responsibility, aiming to think about the way in which these financial resources were used and applied.<\/span><\/p>\n

But how can banks change?<\/span><\/h3>\n

Simple. They can accelerate the process of changing companies' mindsets. Imagine if a company was denied credit for not having good sustainability practices?<\/span><\/p>\n

This would certainly cause the market's socio-environmental concern to rise immediately. The opposite must also be real, companies with conscious attitudes benefit from the release of credit.<\/span><\/p>\n

The green economy may seem utopian, but thousands of companies and banks have already taken important steps. One of them is the topic of our next topic.<\/span><\/p>\n

The role of <\/span>green bonds<\/span><\/a> (or <\/span>green bonds<\/span><\/i>)<\/span><\/h2>\n

This is a tool to promote the green economy.<\/span><\/i><\/p>\n

They are debt securities designed to encourage investments in environmentally responsible projects, focused on their social impacts. In other words, they raise funds for activities proven to be relevant in defending environmental values.<\/span><\/p>\n

These papers are issued by companies and financial institutions with the aim of enabling projects that have a positive environmental impact.<\/span><\/p>\n

These titles require a high degree of transparency from companies, as they are always subject to external evaluation.<\/span><\/p>\n

A group of application managers, led by <\/span>Climate Bonds Initiative<\/span><\/a> and responsible for the allocation of around R$ 1.6 trillion, <\/span>issued statement<\/span><\/a> to reaffirm its commitment to the threats and effects of <\/span>climate changes.<\/span><\/a><\/p>\n

Some of the most important agents in the Brazilian financial market have signed this declaration, such as BTG Pactual, BB DTVM, Ita\u00fa Asset Management, Santander Asset Management, Sul Am\u00e9rica Investimentos and UBS Brasil.<\/span><\/p>\n

As the problem of global warming is one of the priorities, there is also an exclusive title for investments in <\/span>climate issues<\/span><\/a>: you <\/span>Climate Bonds<\/span><\/i>.<\/span><\/p>\n

Socio-environmental projects need financial stimulus. And unfortunately, many governments do not have the necessary capital to support this mission to transition to a low-carbon economy. <\/span><\/p>\n

Therefore, the titles <\/span>Green <\/span><\/i>It is <\/span>Climate <\/span><\/i>They constitute a way for companies and investors to implement and facilitate important projects to continue on the path to sustainable development.<\/span><\/p>\n

According to the Climate Bonds Initiative, as of September 2016 there was a balance of over US$140 billion in labeled Green Bonds globally. While another US$ 576 billion represented unlabeled securities. In other words, bonds that would have the potential to be green but were not considered as such.<\/span><\/p>\n

See the differences between true titles and conventional titles:<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
Characteristics<\/strong><\/td>\nGreen Bonds<\/strong><\/td>\nConventional Titles<\/strong><\/td>\n<\/tr>\n
They are debt securities<\/strong><\/td>\nX<\/strong><\/td>\nX<\/strong><\/td>\n<\/tr>\n
Pay coupons periodically or upon maturity<\/span><\/td>\nX<\/span><\/td>\nX<\/span><\/td>\n<\/tr>\n
Can receive credit rating note<\/span><\/td>\nX<\/span><\/td>\nX<\/span><\/td>\n<\/tr>\n
Typology according to debt guarantee<\/span><\/td>\nX<\/span><\/td>\nX<\/span><\/td>\n<\/tr>\n
Financing or refinancing<\/span><\/td>\nX<\/span><\/td>\nX<\/span><\/td>\n<\/tr>\n
Resources allocated to Green Projects<\/span><\/td>\nX<\/span><\/td>\nPossibly<\/span><\/td>\n<\/tr>\n
Labeled as green and promoted as such\u00a0<\/span>way with investors<\/span><\/td>\nX<\/span><\/td>\n<\/td>\n<\/tr>\n
The issuer commits to some level\u00a0<\/span>transparency and documentation on\u00a0<\/span>the use of resources in Green Projects<\/span><\/td>\nX<\/span><\/td>\n<\/td>\n<\/tr>\n
Projects receive green credentials\u00a0<\/span>external evaluation<\/span><\/td>\nX<\/span><\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/h2>\n

Conclusion<\/span><\/h2>\n

Do you believe that sustainable finance is a possible initiative?<\/span><\/p>\n

It may be difficult for some people to imagine a capital market with socio-environmental awareness. However, sustainable finance must be the next step in the evolution of capitalism.<\/span><\/p>\n

The financial work of these agents needs to be economically viable, socially fair and environmentally correct. It is the only way to put financial resources at the service of sustainable development.<\/span><\/p>\n

Green bonds are a great way for the economy to do its part, raising resources and lending to causes. Thus, the managers of these projects pay the debt with interest, which is passed on to investors.<\/span><\/p>\n

See these other articles on our blog about sustainable development:<\/span><\/p>\n