Green and sustainability linked finance is on the rise in Brazil, thanks to the ESG framework introduced by Anbima last year. With 37 issuances last year totaling BRL 35 billion, including BRL 6 billion in sustainability-linked bonds, the sector is gaining momentum. Anbima’s executive director, Zeca Doherty, highlighted the increase in ESG investment funds, reaching a total of 91 in the market.
The regulatory framework for green public offerings, inspired by ICMA, has attracted foreign investors to benefit from the structure already in place. Furthermore, upcoming government legislation that includes tax incentives for issuers of infrastructure bonds and sustainable bonds is expected to drive further investment. According to Doherty, this long-awaited measure will incentivize both investors and issuers, creating a favorable environment for sustainable finance in Brazil.
On the regulatory front, the head of Brazilian capital markets regulator CVM emphasized the positive aspect of regulation in the sustainability finance agenda. João Pedro Nascimento stated that sustainability is not about punishment but about rewards, highlighting the potential for growth opportunities in Brazil’s capital markets. While it is still early to assess the impact of these regulations, Nascimento stressed the importance of a gradual and voluntary approach to avoid creating normative costs for market players.
