Brazil published a framework for environmental, social and governance debt that defines eligibility criteria for such bonds in 17 areas. — AFP
BRASILIA: Brazil’s first-ever sustainable bond sale will target several green and social initiatives linked to the United Nations 2030 sustainable agenda.
Brazil published on Tuesday a framework for environmental, social and governance (ESG) debt that defines eligibility criteria for such bonds in 17 areas, including pollution control, renewable energy, clean transportation, the fight against deforestation and adaptation to climate change.
Treasury Secretary Rogerio Ceron said the sale will take place after a road show in mid-September. The terms of the bonds are still being discussed, including the exact offer timing and size, he added.
The offering – which has been anticipated for years – follows President Luiz Inacio Lula da Silva’s efforts to prioritise the environment in his administration, a contrast with policies enacted by former leader Jair Bolsonaro.
The government is working to deliver on a major environmental and social agenda, including a broader green transition plan meant to help the country reach carbon dioxide neutrality by 2050.
“Our main motivation is to show the country’s commitment to a sustainable agenda,” Ceron said in an interview, adding he expects demand to be high.
Treasury officials are planning an investor roadshow by Sept 11, while Lula heads to New York for the United Nations General Assembly. Following those meetings, the bond issuance could happen at any time, Ceron said.
The new bond’s maturity will not be too long and the amount issued will be substantial, Ceron said. Brazil’s international sales are usually above US$1bil. Yields for sustainable bonds tend to be lower, but that is not Brazil’s main goal, he added.
Global ESG debt swelled to more than US$5 trillion in the first quarter of this year, and is expected to continue expanding, according to Bloomberg data. — Bloomberg
