Banco do Brasil's Commitment to climate change - Mziq
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
1 Banco do Brasil’s Commitment to climate change
Banco do Brasil’s
Commitment
to climate change
Banco do Brasil’s Commitment to climate change 2
Context
Sustainability and When considering ESG and their possible impacts
environmental, social and aspects in business strategy, on economic and ecological
governance (ESG) issues the sector can offer new processes, based on strong
have been gaining more financial instruments to the scientific evidence, has
and more relevance over market, such as capital for presented a disruptive
the last few decades. The new technologies, emissions potential of economic and
concern with achieving trading platforms and green social processes that needs
a model of economic loans, taking advantage of to be addressed by society.
development, production the opportunities of shared
value. Thus, sustainability More and more companies
and consumption that is in and global conglomerates
harmony with environmental becomes a long-term
strategic asset in creating seek to adopt policies and
limits and, at the same implement practices to face
time, contributes to the value for companies.
the challenges related to the
reduction of inequalities Climate change is currently climate, making them more
is global and shared by one of humanity’s greatest attractive by generating
governments, companies, challenges. The emission sustainable value in their
non-governmental entities of greenhouse gases (GHG) strategies and incorporating
and civil society in general. caused by human activities non-financial performance
3 Banco do Brasil’s Commitment to climate change
indicators or with the cost of and economic scenario. The change has been among
capital directly linked to the Brazilian government has the top five global risks in
environmental performance. committed itself to reduce terms of probability and
greenhouse gas emissions economic impact.
In 2015, during the United by the year 2025 by 37%
Nations Framework below 2005 levels, with In 2018, the
Convention on Climate a subsequent indicative Intergovernmental Panel
Change in France, 196 contribution of reducing on Climate Change (IPCC)
countries signed the Paris greenhouse gas emissions launched a special report, in
Agreement, a document by 43% below 2005 levels which it reinforces that, even
through which they by 2030. with the goals established
committed themselves to by the countries under
adopt targets for reducing In 2020, the Ministry the Paris Agreement, the
greenhouse gas emissions, of Environment (MMA) trajectory toward an average
aiming to reduce emissions ratified the commitments temperature increase of 3°C
from their production made in the NDCs and also by the end of the century
processes, in an attempt made a commitment to in relation to the pre-
to combine efforts for the neutralize Brazil’s emissions industrial levels (IPCC, 2018),
benefit of a low carbon by 2050. For this objective considering the observed
future, in which global to be achieved, greater trends and the impacts on
average warming does not engagement with the various economic activities.
exceed 2°C above the pre- actors in civil society will
industrial, economic and be necessary, among them
social levels that need to be
addressed by society.
Banco do Brasil. For leaders
To achieve the ultimate
For leaders of the World
Economic Forum (WEF),
of the World
goal of the Agreement,
governments have engaged
environmental risks are
among the most serious
Economic
in building their own
commitments, based on
in terms of their effect on
the world’s wealth and
Forum (WEF),
the so-called Nationally
Determined Contributions
prosperity today. Climate
change has been high on
environmental
(NDC). Through the NDCs, the forum’s agenda for the risks are
each nation presented its past five years, with the
contribution to reducing recognition that it is reaching among the
greenhouse gas emissions, a crisis point in many parts
following what each of the world. According to most serious
government considered the “Global Risks Report
feasible from the local social 2019”, since 2011 climate
1
Available at http://www3.weforum.org/docs/WEF_Global_Risks_Report_2019.pdf
Banco do Brasil’s Commitment to climate change 4
TCFD – Task Force on Climate
-Related Financial Disclosure
The Financial Stability Board and other stakeholders in assets, with the consequent
(FSB)2 was set up in 2009 relation to the impacts of loss of profitability of
by the Group of 20 (G20), a physical risks, transition risks related activities. On the
group of economic ministers and other opportunities other hand, the transition
and central bank presidents related to the issue. to a low-carbon economy
from the 19 most developed generates opportunities
countries in the world, plus According to the TCFD for solutions in mitigating
the European Union. The report3, one of the most emissions and adapting
FSB is the international body significant risks facing to the consequences of
that monitors and makes organizations today is climate change, such as
recommendations on the related to climate change. increasing clean and more
global financial system. While it is widely recognized efficient technologies,
In 2015 it announced the that the continuity of targets for reducing resource
establishment of a task greenhouse gas emissions consumption (energy, fuels,
force, the Task Force on is aggravating global paper), financing low-
Climate-related Financial warming and this may lead carbon farming techniques,
Disclosures (TCFD), to to economic and social prioritization of photovoltaic
develop a consistent way losses, the exact timing and and wind energy sources,
of reporting financial risks severity of physical effects increasing the resilience of
related to climate change. are difficult to estimate, city infrastructure etc.
which makes the problem a
As such, companies unique challenge, especially The expected transition
will have to develop a in the context of economic to a low-carbon economy
governance model for the decision-making. is estimated to require
climate change theme about USD 1 trillion of
containing strategy, risk and Impacts are not only investment per year,
opportunity management physical and do not manifest generating new investment
and management indicators, themselves only in the opportunities. At the same
aiming to provide long-term. The reduction time, the reputational risk
information on the potential of GHG emissions implies a of organizations exposed
impact of climate change to reduction in the use of fossil to the effects of climate
clients, investors, insurers fuels and related physical change can vary significantly,
2
The Financial Stability Board (SFB) was established in 2009 as the successor to the Financial Stability Forum (SFS).
The SFS was founded by the G7 in 1999 and by a demand from G20 leaders in 2008 to become a stronger institution,
it was re-established as FSB in 2009.
Recommendations of the Task Force on Climate-related Financial Disclosures. Available at https://www.fsb-tcfd.org/
3
wp-content/uploads/2017/06/FINAL-TCFD-Report-062 817.pdf
5 Banco do Brasil’s Commitment to climate change
as these organizations may the importance of engaging opportunities to generate
be most affected by the governments, the private value for our stakeholders
physical impacts of climate sector and society in efforts and contribute to the
change, by climate policies to reduce greenhouse gases preservation of the
and by new technologies. A and to adapt communities environment, in 2021
2015 study4 estimated that in areas of climate BB did adherence to
by the end of the century vulnerability, is committed recommendations of the
the value of assets in the to the transition to a low- Task Force on Financial
world at risk from climate carbon economy and to the Disclosures related to
change will range from USD leadership role that Brazil the climate (TCFD) and
4.2 trillion to USD 43 trillion. can assume in this issue. launched the 10 Long-Term
Sustainability Commitments
Banco do Brasil, aware of the Thus, and in order to with goals until 2030, in
relevance and urgency of the continue as protagonists alignment to goals of
issue of climate change and in the search for new global development.
4
The Economist Intelligence Unit, “The Cost of Inaction: Recognizing the Value at Risk from Climate Change”, 2015.
Value at risk measures the loss a portfolio may experience, within a given time horizon, at a particular probability, and
the stock of manageable assets is defined as the total stock of assets held by non-bank financial institutions. Bank
assets were excluded as they are largely managed by banks themselves.
Banco do Brasil’s Commitment to climate change 6
What guides us?
At Banco do Brasil, in business and in the ethical CMN 4.327 / 2014, SARB
Corporate Sustainability is and transparent relationship Normative No. 14 of 2014
expressed in policies and with stakeholders. and the improvement of
in the various voluntary practices adopted by BB.
commitments assumed over Climate change is included The monitoring of the action
time. The main objective of in the Socio-environmental
plan for the implementation
Responsibility Policy - PRSA,
Sustainability Governance of PRSA takes place through
in the BB Sustainability
is to manage BB’s socio- the Sustainability Plan -
Guidelines for Credit
environmental performance, Agenda 30 BB.
and also in the Socio-
which occurs based on
environmental Guidelines The Guidelines provide
the implementation and
- Restrictive List and socio-environmental
dissemination of the
Exclusion List. guidance to be considered
Socio-environmental
Responsibility Policy In 2019, PRSA was in the analysis of loan and
(PRSA), which considers, updated in light of financing proposals. They
in an integrated manner, market developments, address strategic issues,
the economic, social and greater adherence to CMN including climate change,
environmental dimensions Resolutions 4.557 / 2017, and are applicable in the
7 Banco do Brasil’s Commitment to climate change
At Banco do Brasil, Corporate Sustainability
is expressed in policies and in the various
voluntary commitments assumed over time.
analysis and granting of activities in which the Management Policy with the
credit to the sectors of Bank assumes credit risk objective of contributing
Agribusiness, Irrigated under certain conditions, to improving the risk
Agriculture, Electricity, applying different rigor management, establishing
Civil Construction, Cement, in the analysis, granting guidelines for proactive
Mining, Oil & Gas, Transport, and monitoring of credit
action and taking advantage
Paper & Cellulose and Steel. (Restrictive List). The
Exclusion List, as the name of opportunities related to
The elaboration and annual
implies, lists excluded climate issues.
reviews of the Guidelines
count on the participation activities that the Bank
Other policies include
of several stakeholders does not assume credit risk
due to legal impediments various socio-environmental
(shareholders, industry aspects, which are also
experts, NGOs, customers or because they are not
in alignment with the BB considered in business and
and employees), supported
Guidelines. administrative practices,
by the analysis of studies
such as credit and
and reports that, in turn, In 2020, the Guidelines were
consider projections of investment operations, and
updated considering the
global climate models. legal, political, economic relationships with suppliers
and socio-environmental and employees. Due to their
The Socio-environmental aspects. relevance, these guidelines
Guidelines - Restrictive List are replicated in the Credit
and Exclusion List, on the In 2020, BB approved Sustainability Guidelines for
other hand, bring various the Specific Climate Risk different sectors.
Banco do Brasil’s Commitment to climate change 8 Sustainability Plan - Agenda 30 BB Banco do Brasil’s three years, covering Sustainability Plan the entire company. contributes to the improvement of business Since 2017, the Plan has and processes by been called Agenda 30 BB. consolidating actions with The new agenda reflects a social and environmental the premises of the global focus. Revised every two 2030 Agenda and is years and ordered into inspired by the Sustainable sustainability challenges Development Goals (SDGs), prioritized by senior responding to the global management, it is broken call to build a world driven down into commitments by adequate management established for a period of of natural resources, respect
9 Banco do Brasil’s Commitment to climate change
for human rights is a transversal pillar in In 2021, the Sustainability
and generation of the Bank’s strategy, whose Plan - Agenda 30 BB 2021-
sustainable results. leaders are committed to 2023 was approved. The
the challenge of reconciling climate issues are included in
The Agenda 30 BB ensures business competitiveness the challenge: “Improve the
that internal processes are
with the construction of governance and management
adopted in a robust manner,
a more sustainable world. of risks and opportunities
agreeing on commitments
Sustainability is one of the related to climate issues,
and actions that have an
impact on the business as dimensions present in the giving transparency to Banco
a whole. With increasingly Corporate Strategy BB 2021- do Brasil’s commitments
sustainable business and 2025 and presents itself as and practices in relation to
administrative practices, BB one of the objectives in the the topic”. Through BB’s
disseminates to its entire Bank’s strategic map, which Annual Report, account
value chain the importance has its leaders committed to is taken of the actions
of incorporating the the challenge of reconciling developed in the previous
principles of sustainability in business competitiveness period and the actions that
the planning and execution with the construction of a will be developed in the
of actions. Sustainability more sustainable world. coming years.
Banco do Brasil’s Commitment to climate change 10
Voluntary pacts and commitments
For almost three decades, Banco do Brasil has participated in various Forums
and Initiatives in the governmental and private spheres.
1985 1995 2003 2005
Institution of Fundação The Green Protocol BB’s adhesion BB becomes the first financial institution
Banco do Brasil to is signed, a charter to the Global to join The CEO Water Mandate.
contribute to the of principles Compact and
social transformation adopted by official creation of the BB becomes a signatory of the Women’s
of Brazilians and Brazilian banks, Charter of Social Empowerment Principles and the Principles
development sustainable including Banco and Environmental for Responsible Investment, the latter
development of the do Brasil (BB). Responsibility through BB DTVM.
country. Principles.
Launch of the Carbon Efficient Index (ICO2),
of which BB is a member.
2010
2009 2007 2006
BB becomes the first financial institution
to join The CEO Water Mandate. BB becomes a founding
BB becomes a signatory of the Women’s member of the Brazilian
BB joined the BB’s first
Empowerment Principles and the Principles GHG Protocol Program,
Caring for Climate sustainability
for Responsible Investment, the latter receives the Pro-Gender
and Empresas pelo report in
through BB DTVM. and Race Equality
Clima platforms. accordance with
Seal and discloses its
Launch of the Carbon Efficient Index the GRI model.
Corporate Governance
(ICO2), of which BB is a member. Code.
2012 2013 2014 2015
BB is listed in the “World” portfolio of the Dow Jones
Sustainability Index (DJSI), receives the Pro-Ethics BB adopts
Company seal and adheres to the Business Pact for BB joins the the OECD
Integrity and Against Corruption and the Business Sustainable Disclosure
Guidelines for
Charter for Human and Rights for the Promotion of Livestock of BB’s SARP.
Multinational
Decent Work. In the same year, Grupo Segurador BB e Working Group. Companies.
Mapfre adheres to the UN Principles for Sustainability
in Insurance.
2019 2018 2016
BB is recognized as the most sustainable Alignment of Banco
BB becomes a signatory to the UN
financial institution in the world, do Brasil’s Sustainability
Standards of Conduct for Businesses
appearing among the 10 most sustainable Plan with the Sustainable
to combat discrimination against
corporations in the Global 100 ranking of Development Goals (SDGs),
lesbian, gay, bisexual, transgender
Corporate Knights, announced in Davos, which was renamed Agenda
and intersex people.
during the World Economic Forum. 30 BB.
2020 2021
Banco do Brasil launches 10 long-term sustainability commitments
BB achieves the “AA” rating and the new Sustainability Plan – Agenda 30 BB for the period 2021-2023.
from Morgan Stanley Capital
International (MSCI) ESG Rating. BB is once again recognized as one of the most sustainable companies in the
world by the Global 100 Ranking, ranking 3rd overall.
BB’s SARP is updated in view of the
best market practices. BB’s adherence to the recommendations of the Task Force on Climate-Related
Financial Disclosures (TCFD).11 Banco do Brasil’s Commitment to climate change
2007
Among the
voluntary • Caring for Climate • Sustainable
commitments – The Global Development
and pacts made Compact Goals - SDG
over time, several • Carbon Disclosure • Equator Principles
address the Project – CDP
issue of climate • Brazilian GHG
change directly or • Companies for Protocol Program
transversely, such the Climate - EPC
as the following: Platform • TCFDBanco do Brasil’s Commitment to climate change 12
Corporate Sustainability
Corporate Sustainability businesses, define guidelines Risk and Capital
permeates the for the topic, in addition to Committee
organizational structure and giving a multidisciplinary Advises the Board
is expressed in the policies view to decision making. of Directors in the
and various voluntary performance of its
commitments assumed. The Strategically, the RSAE
functions related to risk
main objective of Corporate theme is conducted by the
management, including
Sustainability is to manage Autonomous Executive
the socio-environmental
social and environmental Management of Corporate
and capital risk;
performance, based on Sustainability (Gesem),
the Socio-environmental linked to the Vice-
Presidency of Government
Executive
Responsibility Policy (PRSA), Sustainability
which takes into account, and Corporate Sustainability
(Vigov), while the Risk
Committee (Cesus)
in an integrated manner, Subordinated to the Board
the economic, social and Management Directorate
of Officers and composed
environmental dimensions (Diris) is responsible for
of Vice-Presidents and
in business and the ethical managing climate risk.
Directors and has, among
and transparent relationship At Banco do Brasil, other objectives, to decide
with stakeholders. governance in sustainability on the Sustainability Plan
follows the following - Agenda 30 BB, to guide
Issues related to climate
structure: the implementation of
change, both from the
sustainability initiatives
perspective of risks and with potential impact
opportunities, are dealt Board of in business, to define
with, according to their Directors guidelines for the topic,
specificities, by the various Monitors socio- in addition to giving a
instances that are part of environmental multidisciplinary view to
Corporate Sustainability performance and decision making.
at BB. ongoing initiatives
every six months; Sustainability Forum
In 2021, the Executive
Sustainability Committee Instance composed of
(Cesus) was created, Board of Officers executive managers
subordinated to the Board Responsible for and the Banco do
of Officers and composed approving and Brasil Foundation
of Vice-presidents and monitoring the initiatives (BB Foundation). The
directors and has, among of the Sustainability Forum supports the
other objectives, to decide Plan - Agenda 30 BB, incorporation, alignment
on the Sustainability Plan until 2020. In 2021, it and dissemination of
– Agenda 30 BB, to guide started monitoring The sustainability precepts
the implementation of ESG performance and and practices, in addition
sustainability initiatives related initiatives every to monitoring socio-
with potential impact on six months; environmental initiatives13 Banco do Brasil’s Commitment to climate change
and the implementation of socio-environmental Risk Management
of actions of Agenda 30 risk in the 1st Line of Directorship
BB. It meets quarterly Defense related to Unit responsible for
and, until the end of purchases, contracts, corporate management
2020, was subordinated management of of socioenvironmental
to the Executive logistics resources and climatic risks in the
Business Committee and and eco-efficiency; 2nd Line of Defense.
currently reports to the
Executive Sustainability
Committee;
Sustainability Governance
Corporate
Sustainability
Management
(Gesem) Board of Directors
It is an Executive
Management linked to
the Vice- Presidency Risk and
of Government and Capital
Corporate Sustainability Committee
– responsible for guiding
the sustainability
theme and for the Board of
specific management Officers
of socioenvironmental
risks in the 1st Line of
Defense, with strategic
and cultural guidelines
for the topic; Executive Corporate
Sustainability Sustainability
Credit Directorship Committee Management
Unit responsible for the (Cesus)
specific management of Credit
socioenvironmental risk Directorship
in the 1st Line of Defense
related to the credit Sustainability Supplies,
process; Forum Infrastructure and
Property Directorship
Supplies,
Infrastructure
and Property Risk Management
Directorship Directorship
Unit responsible for the
specific managementCompromisso
Banco
do Banco
do Brasil’s
do Brasil
Commitment
com as Mudanças
to climate
Climáticas
change 14
Climate risk management
By definition, climate risk Management Policy with the the TCFD and based on pre-
is the possibility of losses objective of contributing existing information, in 2019,
arising from the transition of to the improvement of risk in partnership with WWF,
businesses to a low-carbon management, establishing Banco do Brasil prepared
economy, the triggering of guidelines for proactive the document Climate
extreme climate events or action and taking advantage Change, Scenario Analysis
that will have long-term of opportunities related to and Strategy.
consequences and may climate issues.
affect the generation of The study considered
value by companies. This The initiative reinforces our the impacts of rising
new approach was based commitment to the topic, temperatures for seven
on the recommendations and is in line with the best traditional agricultural
published by TCFD, in practices in the market. The crops, including soy, corn
which financial institutions financial sector’s perspective and rice. Two climate
were asked to identify on the way in which scenarios were addressed:
and transparently disclose companies incorporate
climate change risk, and to climate risks directly
suggest analysis of climate impacts the assessment and
elements as key elements decision-making process on Temperature
for the resilience of the the allocation of resources. increase below
business strategy.
OThe effects of climate 2°C (in line with
change can influence
RCP 4,5);
By November 2018, the
management of risks arising various market segments.
from climate change was Thus, it seeks to know and
Average
carried out at BB within measure the impact of
temperature
the scope of social and physical and transition risks
increase of 3.7°C
environmental risk. Due on financing and insurance
until the end
to the worsening of the portfolios. Physical risks
of the century
possibility of losses resulting related to extreme weather (equivalent to
from the triggering of events, such as floods and RCP 8.5).
extreme weather events windstorms, are considered
and the transition of in the evaluations because
businesses to a low carbon they are directly related to
economy, which may affect the increase in operating
the generation of value costs and the reduction of The results obtained
by companies, climate risk business revenues. were expressed in maps
is now considered even classifying Brazilian
more relevant in strategic Faced with the potential municipalities at high or
decisions, since it is an impacts of climate change, low risk of exposure to
element that will influence financial institutions have elevated temperatures.
the future profitability of sought to improve their Allowing the management
the Bank’s business. understanding of future areas of products related to
risks to their business, agribusiness to increase the
In 2020, the Board of strategies and financial resilience of their strategic
Directors approved the performance. Considering performance in the face of
Specific Climate Risk the scenarios pointed out by the challenges presented15 Banco do Brasil’s Commitment to climate change
and to minimize potential Ministry of Agriculture, alerts, in turn, are registered
losses in the face of extreme Livestock and Supply, revised in the Crop Monitoring
weather events. annually, which indicate the Panel and allow observing
municipalities with climatic the recurrence of extreme
In the processes of granting and soil suitability for events and changes in
and conducting loans and certain crops and which are the local weather pattern
financing, the management the most adapted cultivars. and adopting preventive
of climate risk is particularly Furthermore, BB customers measures to mitigate
important, as Banco do Brasil also have a portfolio of crop losses.
is the largest financier of products at their disposal
Brazilian agribusiness, with that includes Agricultural Seeking to analyze and make
a 60% market share. Thus, Insurance, Agricultural available data and models
climate risks have significant Revenue Insurance, Proagro for assessing environmental
impacts on the rural activity and Proagro Mais. and economic impacts
financed by BB, due to its related to transition risks,
vulnerability to increasingly The recording of climatic BB participates in a working
recurrent and intense events is carried out through group of Brazilian Federation
extreme climate events. BB’s Climate Risk Monitoring of Banks (Febraban) with
System, which covers the the objective of evaluating
As a way to minimize entire national territory the risks and opportunities
these risks, we observe and is based on alerts of of the transition to an
the recommendations of climatic events issued by economy low carbon for the
the Agricultural Zoning of the Bank’s agribusiness Agriculture, Electric Utilities,
Climate Risk (Zarc) of the advisory network. These Oil & Gas (O&G) and biofuels
sectors from integrated
scenarios for different levels
of climate ambition.
Long-term climatic
scenarios will be developed
and analyzed considering
different limits for the
increase of the global
average temperature, from
carbon budgets, as well as
the evolution of the pricing
of carbon dioxide (CO2) and
other GHGs until 2060. From
the results of the modeling,
a database will be prepared,
made available to Febraban,
including projections of
supply and demand for
energy and agricultural
commodities for each long-
term climate scenario.Banco do Brasil’s Commitment to climate change 16
The methodology for Intergovernmental Panel on Program (COPPE) at the
creating the scenarios Climate Change) to define Federal University of Rio de
is based on Integrated transition scenarios for a low Janeiro (UFRJ), they are:
Assessment Models (IAMs), carbon world, considering
which allow assessing the the interactions between • COFFEE (Computable
interactions between the different economic sectors, Framework for Energy
different sectors of the GHG emissions and its and the Environment);
economy. Such tools are consequences for the global
often used by international climate. • BLUES (Brazilian Land Use
and Energy System); e
research groups and the It is expected to use at least
Intergovernmental Panel 3 three scenarios developed • TEA (Total-Economy
on Climate Change (IPCC - by the Energy Planning Assessment).17 Banco do Brasil’s Commitment to climate change
The study being developed by
Febraban is composed by the following BB is
accomplishments:
evaluating the
Activity 1: opportunities for the incorporation
Elaboration of the transition to a low
detailed work plan carbon economy in of the
the sectors considered
(Completed);
and dissemination of results and
Activity 2:
Collection of needs and
preliminary results to be
validated with Febraban recommendations
perceptions with the
Febraban team, the
(In preparation);
of this study in
Febraban Climate and
Green Economy WG
Activity 5: its management
Consultation with
and the Sitawi team
(Completed);
Febraban on preliminary of transitional
Activity 3:
results (Awaiting previous
step); climate risks.
Elaboration of a detailed
conceptual plan Activity 6:
(Completed); Availability of the results
of the scenarios produced
Activity 4: in an easily accessible
Construction of scenarios format (Waiting for the
for assessing risks and previous step);
BB is evaluating the the course of climate
incorporation of the results change itself, the breadth
and recommendations of this and complexity of the
study in its management of transmission channels, the
transitional climate risks. primary and secondary
At the end of the work, it impacts, and the need to
is expected to know the consider transition risks in
uncertainties surrounding financing operations.Banco do Brasil’s Commitment to climate change 18
Business opportunities
On the opportunities arising Through it, positive financial and reaffirmed in its opinion
from climate change, the implications are identified the mostly transformational
Bank supports initiatives with the contracting of contribution of the
aimed at mitigation, such as operations that ran to portfolio.
the Low Carbon Agriculture R$ 1.48 billion in 2020.
Program (ABC Program), Customers have at their The identification of the
which represents an disposal a product portfolio credit lines eligible to
opportunity for both BB that includes Agricultural compose BB’s Sustainable
and for rural producers. Insurance, Agricultural Business Portfolio is based
Insurance Billing, Proagro on the methodology
The ABC Program has the developed by the Brazilian
and Proagro Mais. In 2020,
potential to contribute to Federation of Banks
59.2% of all agricultural
the achievement of the (Febraban) and published
costs, in the amount of R $
environmental goals of the in the study Measuring
22.67 billion, were covered
Paris Agreement (NDCs). Its Financial Resources
by Agricultural Insurance and
role is especially relevant, Allocated in Green Economy,
Proagro to mitigate the risk
as Brazil has presented and also in BB Sustainable
of loss of production due to
targets that are not Finance Framework,
extreme weather events.
conditional on the receipt prepared according to
of international resources, During 2020, BB reviewed the main international
which further justifies the the credit lines that standards, such as the Green
need for its strengthening compose the green Bond Principles (GBP) and
and alignment with the portfolio, according to the Social Bond Principles (SBP),
objectives of mitigating methodology of Febraban among others.
greenhouse gas and BB Sustainable Business
emissions (GHG). Framework, which had In 2020, BB’s Sustainable
a second opinion from Business Portfolio had a
Since its launch in 2010, balance of R$ 244.7 billion.
BB has been leading the Sustainalytics. Based on
this and also considering It is composed of investment
initiative, which finances
the social contributions and loan-related credit
sustainable agricultural
identified in the portfolio, operations for the renewable
production systems,
a new nomenclature was energy, energy efficiency,
with recognized capacity
proposed for the green sustainable construction,
to reduce or sequester
portfolio: Sustainable sustainable transport,
greenhouse gas (GHG)
Business Portfolio. sustainable tourism,
emissions and promote the
water, fisheries, forest,
production of vegetation/
The result of the job sustainable agriculture
biomass and food, as well
was submitted to the and waste management
as the preservation of
independent evaluation of sectors. Companies that
the environment.
Sitawi Finanças do Bem, an receive credits that are
Initiatives aimed at reducing important and recognized inserted in segments whose
CO2 emissions in agricultural Brazilian organization, performance generates
activity are supported by which classified the effective transformational
the Low Carbon Agriculture operations according to their social and environmental
Program (ABC Program). contribution to sustainability impacts are also considered.19 Banco do Brasil’s Commitment to climate change
Mostly High /
Transformational
Sustainable Social
Loan Portfolio Loans
51.5%
Total ESG (R$ - billion)
Dec/2020
Portfolio:
R$ 244.7 billion
R$ 126.03 billion
Low Carbon
Best
Agriculture SocioEnvironmental
Companies
13.2% Practices
26.7% 8.6%
R$ 32.17 billion R$ 65.36 billion R$ 21.14 billion
Social Loans Low Carbon Agriculture
Government 49.45 Working Capital (No-till) 25.31
FIES (Student Loans) 46.87 Low Carbon Program 6.86
Minha Casa Minha Vida
21.18
(Low Income Housing Loans) Companies
Covid Relief Loans 8.13 Companies 21.14
Other 0.39
Addittionality / High / Transformational
Best Socio-environmental Practices Sustainability Moderate / Effective
Contribution
Pronaf Mais Alimentos Limited / Transitional
36.34
(Loans for Food Production)
Investment Loans 11.85
PCA/Moderagro Second Opinion
(Agribusiness 9.10 See
Infrastructure Financing) the full
report:
Working Capital (Pronaf) 6.30
Investment Loans (Pronaf) 1.77
Find out more at ri.bb.com.br/governanca-e-sustentabilidade/sustentabilidade/Banco do Brasil’s Commitment to climate change 20
In October 2020, BB and had the technical The model is unusual in the
approved its sustainable support of the consultancy Brazilian financial system, in
finance model, which Sitawi Finanças do Bem, addition to considering the
establishes parameters and resulting in the elaboration issues labeled as sustainable,
management for raising of the “Sustainable Finance green and social (supported
funds for projects classified Framework”, whose green by the Framework), it also
as sustainable in the global and social categories considers the possibility
market. Funding resources are contemplated. The of debt issues of the type
of this type can be used possibility of leveraging Sustainability-Linked Loans
to finance projects capable projects related to low- and Sustainability-Linked
of offering financial returns carbon agriculture sets it Bonds. The SLLP and SLBP
and linked to Environmental, apart from those available standards link the interest
Social and Governance on the market. The paid for these issues to the
(ESG) benefits. Framework was approved performance of its ESG
by Sustainalytics, one of indicators, such as reducing
The process started with the main independent the company’s carbon
the Technical and Financial companies in the world footprint, increasing the
Cooperation Agreement of Second Opinion diversity of its staff and
between Banco do Brasil (SPO), following a set of reducing the risk of credit
and the Inter-American international standards portfolios of high socio-
Development Bank (IDB), and guidelines. environmental impact.21 Banco do Brasil’s Commitment to climate change
BB Environmental
Management System
The internal management The System consists actions to stimulate the
of the effects of climate of a set of objectives, efficient consumption
change is aligned with the premises, requirements, of natural resources and
Sustainability Plan - Agenda responsibilities, programs, prevent pollution, by raising
30 BB, in relation to the initiatives and standards awareness, engagement
development of initiatives for the implementation and strengthening of
and adoption of practices of environmental culture in RSA. In addition,
that contribute to the guidelines, aligned with BB continuously seeks to
improve its environmental
mitigation of the effects BB’s Specific Policy on
management skills, through
of operations on social and Socio-Environmental training aimed at developing
environmental aspects. Responsibility. an environmentally
The BB Environmental It is the premise of BB’s EMS appropriate conduct inside
and outside the professional
Management System to consider the external
environment.
- EMS is in accordance and internal context of the
with environmental organization in the search BB’s EMS is composed of
legislation, with reference for continuous improvement Environmental Programs,
to the Brazilian Standard of its System. BB’s EMS Initiatives and Indicators,
ABNT NBR ISO 14.001. carries out communication including:
The BB
Environmental • Energy Conservation • Sustainable Procurement
Program - Procen and Contracting
Management • Rational Water Use
• Paper Consumption
Reduction Project
System - Program - Puragua
• Disposal of Unserviceable
EMS is in • Toner Cartridge
Reconditioning
Movable Property
accordance Program - Prorec • ISO 14.001 certification
•
with • Selective Collection
Program
LEED Certification in
Energy and Environment
environmental •
Design - LEED
PGRS - Solid Waste • Indicator: Operational
legislation Management Plan Efficiency Index - IEOBanco do Brasil’s Commitment to climate change 22
The following are some initiatives that contribute to the reduction of GHG emissions.
Consumption of energy from renewable sources
Electric power consumption (comparison)
Electric power consumption (GWh) Total expenses (R$ million)
598 571
533 458 464
422
Target set to 2019:
-2% in relation to 2018 consumption
Target set to 2020:
-5% in relation to 2019 consumption
Target set to 2021:
-5% in relation to 2020 consumption
2018 2019 2020 2018 2019 2020
Since 2018, Banco do Brasil involve the reduction of was 88%, with electricity
and EDP have maintained greenhouse gas emissions. consumed from renewable
a partnership for the GHG in its operations. sources5.
Bank’s entry into the Free
Energy Market, in the Free In 2020, two buildings were In this context, in March
Contracting Environment migrated to the Free Market, 2020, we inaugurated our
(ACL). The contract totaling the 24 provided first solar power plant in
provides for the provision for in the contract, which the distributed generation
of approximately 400 GWh resulted in savings of R $ 4.5 modality. In October,
to 24 BB facilities located million, equivalent to a 20% the second plant was
in 14 states, under a five- expense reduction compared inaugurated and another
year contract. To get an idea to the captive market tariff. five plants are expected to
of the volume contracted, (acquired directly from the start operating by the end
the energy purchased is energy utility). of 2021.
equivalent to the annual Also in 2020, we assumed The two projects in
consumption of a city with the commitment to operation have a combined
130 thousand inhabitants. expand the participation of installed capacity of 6 MW,
The great benefit of the renewable sources in our generating 15 GWh / year
partnership is that the energy matrix: the objective and will guarantee the
energy purchased is of the is to reach, by 2024, a level supply of renewable energy
incentive type, originating of supply of energy 90% to 141 branches, allowing
from renewable sources, renewable. The objective will the institution to save R$
such as wind, solar and be achieved through remote 53.7 million over 15 years.
small hydroelectric plants distributed generation, They will also enable an
(PCHs), which reaffirms the with 22%, and through the average reduction of 45%
Bank’s commitment to the free market, with 68%. In in the energy bill of our
adoption of actions that the previous year, this level branches and will contribute
5
Source: BB/EDP and ONS Contract – National Electric System Operator, available at:
http://www.ons.org.br/paginas/sobre-o-sin/o-sistema-em-numeros23 Banco do Brasil’s Commitment to climate change
to the diversification of the to the actions implemented,
renewable energy matrix in and due to the restriction
Brazil. When all the plants of employees on the
are in operation, 3,150 bank’s premises, due to
tons of carbon dioxide will the pandemic and the
no longer be emitted per implementation of the
year, which corresponds to home office. The total saved
the planting of about 21 reduced the annual expense
thousand trees. by R $ 42 million and
would be enough to supply
In 2020, new initiatives electricity to more than 18
to optimize energy thousand homes per year.
consumption and electricity
costs joined those already
implemented in previous
years and which are still in Water Consumption and Paper Use
progress. Among the new
initiatives, the following Water consumption (comparison)
were implemented:
• Automated management
of electric energy - an 2018 2019 2020 Target set to 2019:
initiative carried out -1% compared to
at the units that may Water the previous year
reduce expenses with consumption(1) 1,383 1,136 955.7
this input by more than Target set to 2020:
(thousand m3)
R $ 500 thousand, as -5% compared to
well as the expansion of the previous year
operational efficiency Total expenses Target set to 2021:
and the improvement of 31.9 33 28.6
(R$ million) -5% compared to
consumption indicators; the previous year
• Integrated control
of energy, water and
Reduction of 17.9% in 2019 | Reduction of 15.9% in 2020
building utilities - start of
installations for a group
of 300 service units,
(1) Recycled water is not used in the units. The water supply is carried out by the
with the expectation of concessionaires. Following the same methodology adopted in 2019, water
achieving 15% savings consumption in 2020 was obtained based on the average R$/m³, after the
in consumption over survey of 11 thousand water bills registered by a contracted company. Thus,
the four-year service BB’s water consumption is the result of the average (R$/m³) by the annual
expense, totaling R$ 28.6 million.
contract. Regionalized
energy consumption (2) Due to the nature of our industry, we have not yet carried out the
measurement of total water consumption in all areas with water stress in
parameters (kWh / m²)
megaliters.
are used.
(3) We monitor the need for facilities to purchase mineral water outside
Regarding electricity local water utilities. In the cases in which the water supplied is not fit for
consumption or even if there is no supply of the input, mineral water is
consumption, there was a acquired through the facility in two ways: water truck, to supply the facility
reduction of 7% compared as a whole (water tank); bottled mineral water, for the consumption of
to 2019, equivalent to 41 employees and customers.
GWh. This reduction is dueBanco do Brasil’s Commitment to climate change 24
Number of printouts (millions)
224.22
173.51 Target set to 2020:
-50% in relation to 2017 consumption
134.92
102.67 Target set to 2021:
-20% in relation to 2020 consumption
Target set to 2025:
eliminate printing documents
2017 2018 2019 2020 54% reduction in 2020
In relation to water impacts on the environment
consumption – an input
from public concessionaires
caused by the production
and disposal of material
in addition to
– regionalized parameters
of efficient consumption are
will be reduced. Financially,
the drop in expenses for
optimizing
also adopted. Management paper is added to that processes
is carried out through the of other related inputs,
establishment of actions such as cardboard boxes through
for units that present water for storage, envelopes
consumption above the for transportation, reels, digitalization,
established targets. In this printer maintenance, toner,
sense, the inspections in the pouches, in addition to space the impacts
hydraulic installations must and cabinets for filing. As
be highlighted, to detect the a result of these initiatives, on the
causes of high consumption. the following were achieved
during the year: environment
Through BB initiatives
such as Papel Zero, which caused by the
aims to digitally transform
our processes and raise production
• 59.5% reduction in
awareness, engagement and
guidance for employees, it consumption of A4 and disposal of
paper, compared to 2017;
was possible to reduce the
consumption of A4 paper
material will
• 52% reduction in the
by 59.5% by December
2020 in relation to
consumption of bobbins be reduced.
for cash terminals and
December 2017, exceeding
self-service terminals
the established target
compared to 2017.
of 50%. Thus, in addition
to optimizing processes
through digitalization, the25 Banco do Brasil’s Commitment to climate change
Selective external audits that cumulative average of
certify the requirements the branch’s monthly
Collection Program of the standard and consumption records,
The Selective Collection prove the effectiveness with a consumption
Program contemplates of environmental actions target of equal to or
the management of solid, related to consumption below the established
non-hazardous recyclable of water and electricity, regional standard.
waste (paper, plastic, metal selective waste collection
and glass) generated at BB’s and services and the • Paper: linear reduction
facilities, which are sent for involvement of the 8.000 target of 2% of
recycling in accordance with people working within consumption compared
public policies and current the area. to the previous year.
environmental legislation.
• Selective Collection:
In 2020, the program Operating assessed from the
reached the mark of 1.849
facilities with the process Efficiency Index monthly records of
implemented, compared to the volume of waste
Operational eco-efficiency selectively discarded
1.679 participating facilities index in order to increase the
in 2019. (paper, plastic, metal,
coverage of the Selective and glass) and sent for
Waste Collection Program,
Environmental intensify the reduction
recycling.
Certifications - ISO of GHG emissions and • In 2020, 76% (4.364)
rationalize the consumption of the units assessed
14.001 and LEED of water, energy, and paper, achieved the target
we adopted the Operational
At the end of 2020, we set for the IPE. This
Ecoefficiency Index (IEO), a
maintained the following result was achieved
mechanism that assessed all
certifications, which attest as the one related
branches for the following
to our commitment to aspects: to communication,
environmental preservation: guidance, and monitoring
• Water/electricity: of the branches’
• Leadership in Energy assessed from the performance.
and Environment Design
(LEED), certification
related to sustainable
construction and
awarded by the United
States Green Building
Council, for the
headquarters in Brasília
(Federal District).
• ISO 14.001 Environmental
Management System
in operation at the
company headquarters
in Brasilia (Federal
District) and at the Torre
Matarazzo Building in
São Paulo (SP) Banco
do Brasil’s The GABB is
verified by internal andBanco do Brasil’s Commitment to climate change 26
Carbon in the Public Emissions The establishment of the
Registry. The information is targets was based on the
Management also made available to the guidelines and criteria
BB’s GHG Emissions market via CDP (Carbon published by the Science-
Inventory is the main tool Disclosure Project) and Based Targets initiative
for carbon management at Annual Report, in addition (SBTi), and took advantage
the Bank. The inventory is to being part of the national of the level of emissions
built under the Operational social and environmental verified in 2018 reported in
Control approach, indicator reports, such as the its Emissions Inventory.
considering more than BMF&Bovespa’s Corporate In the previous version of
5,000 facilities throughout Sustainability Index (ISE), its Commitment to Climate
the country (retail, and international reports, Change, BB indicated that it
wholesale and government such as the Dow Jones would offset its emissions
agencies, regional units Sustainability Index from Scopes 1 and 2.
and strategic units) (DJSI) of the New York This year it has already
The calculation of the Bank’s Stock Exchange. offset 100% of its GHG
GHG emissions follows emissions from Scopes 2
In 2019, BB committed to in 2020, via Renewable
the specifications of the
offsetting GHG emissions Energy Certificates I- REC
Brazilian GHG Protocol
Program and accounts for from scopes 1 and 2 by (International REC standard).
the gases emitted by its acquiring carbon credits in For Scope 1, 100% emissions
direct activities under Scope the voluntary, regulated or are offset through the
1 (stationary combustion, carbon market. purchase of carbon credits,
mobile combustion and with completion expected
fugitive emissions), Emission reduction by the end of 2021.
Scope 2 (electric power and compensation ICO2 Internal Pricing
consumption) and the
activities that influence targets
Scope 3 (transportation and Based on the average prices
distribution, transportation In addition to providing of qualified projects to
and distribution, business the reporting of the level compose the portfolio to
travel, displacement of and sources of greenhouse offset our emissions, at the
employees, solid and liquid gas emissions by BB, the end of 2019 we approved
waste from the operation). BB Emissions Inventory has the internal carbon pricing,
the function, as already with the adoption of
The Inventory goes through mentioned, of being an R$18.00/ tCO2e (or US$4.50/
external verification, instrument for carbon tCO2e), obtained by
according to ISO 14.064 management, and with calculating the average price
definitions, part of which that, guide the execution of ton of carbon registered
attests that the information sustainability strategy in in the voluntary and
contained in the GHG relation to GHG emissions. regulated markets in Brazil.
inventory is complete,
accurate, consistent, At the end of 2019, Banco do The definition of the internal
transparent and without Brasil established targets for carbon pricing methodology
discrepancies. BB’s GHG reducing greenhouse gases and the internal carbon price
inventory has been gold with a long-term vision. By aims to offset BB’s emissions
certified since 2010. the 2030 horizon, BB has related to scopes 1 and 2, in
committed to reducing its accordance with the climate
BB’s GHG emissions data emissions by 30% for Scopes change commitment and
are published annually 1 and 2. for evaluating investments27 Banco do Brasil’s Commitment to climate change
in the institution’s own
structure, in order to In mid-2020, Banco
support investment stress
testing, as well as motivate do Brasil joined the
low carbon investments, the
supply chain/suppliers and
Benchmark Club, from CDP
employees.
Carbon pricing also leads
investments towards less
carbon-intensive solutions
by internalizing part of the international agreements Suppliers
externalities represented such as the Task-Force for
by emissions, so those Climate-Related Financial For the management of
companies can incorporate Disclosures (TCFD). Scope 3 GHG emissions in
these external costs into its Inventory, BB promotes
The evaluation of companies
their business decisions and actions to mitigate socio-
occurs through the analysis
seek alternatives to minimize environmental risks in
of an extensive questionnaire
their effects. its supply chain within
that includes the main
a broader scope, under
Increase in the CDP parameters related to the
theme of climate change: the optimum of several
evaluation grade instruments that govern this
Governance (policies and
guidelines); Engagement relationship, such as: Code
In mid-2020, Banco do Ethics, Supplier Relationship
Brasil joined the Benchmark of senior management;
Risks and opportunities; Policy, Internal Regulations,
Club, from CDP, seeking among others.
support from the entity and Business strategy; Goals
improving its participation and performance; Emissions The Internal Regulations
in the Climate Change methodology; Verification;
include specific rules for
Program, also from CDP. On Carbon pricing.
sustainable hiring, which
December 8, the program’s The increase in Banco include the Sustainable
2020 cycle result was do Brasil’s score in 2020 Purchasing and Descartes
released, and Banco do Brasil reflects the improvement Standard document
achieved its best result since of practices, such as the available on the BB Portal
2005, reaching a B- score. adoption of a specific for consultation, meeting
In the last three years, the climate risk management the legal requirements and
Bank’s score was D, on a scale policy, increased use of the social and environmental
ranging from A to E. renewable energy, definition commitments assumed.
of internal carbon price, Documentary due diligence
With the score achieved in procedures are also carried
incorporation of criteria
2020, BB becomes eligible out when contracting and
related to climate change
to be included in 2021 in the paying suppliers, covering
in the supply chain and
CDP Brasil Index of Climate the Environmental, Human
expansion of the business
Resilience (I-CDPR70), portfolio with potential Rights and Integrity
which measures the reduction in emissions, dimensions.
performance of the roles of among others.
companies with practices By joining the CDP Supply
in climate management, For more information, Chain in 2017, Banco do
in line with global trends consult Banco do Brasil’s CDP Brasil has been able to
and recommendations Climate Change. better monitor suppliersBanco do Brasil’s Commitment to climate change 28
with respect to their total respondents in the management have signaled
impacts on the environment, year, 70% reported that that this issue should be
on climate change and Climate Change is part of more closely followed by
the water management. their business strategy, an BB. We also underline that
Accordingly, we have guided increase from the previous the list of respondent
our performance in fighting year and the result of suppliers has been improved
climate emergency by awareness raising actions year by year to improve its
encouraging behavioral among our suppliers. representation and capture
changes in the supply our supply chain complexity.
chain, something that can The results obtained in
the Climate questionnaire Therefore, we seek to
be perceived in the results optimize the monitoring
achieved in the 2020 represented an advancement
in the supplier’s climate of emissions and mobilize
CDP Cycle. our supply chain to
change management.
Even in the scenario of the On the other hand, the achieve an increasingly
Covid-19 pandemic, of the results concerning water low carbon economy.29 Banco do Brasil’s Commitment to climate change
Transparency in our actions
Carbon Efficient Index necessary. Thus, with the of those employed in the
(ICO2) of B3 S.A. – decree by the authorities branch network worked
Brasil, Bolsa, Balcão. of the pandemic state, BB remotely. At the end of
took measures to adapt 2020, around 33 thousand
On June 17, 2010 BB and protect its employees, employees (approximately
subscribed to B3’s ICO2, service providers and 36% of the total) were still
São Paulo Stock Exchange suppliers, customers and working remotely. National
and was listed in all the last society in general. travel was restricted and
ten editions. The ICO2 is international travel was
composed of shares of the Awareness-raising and
adoption of measures to suspended, as well as
companies participating
protect against the spread training, events and face-to-
in the IBrX-50 index and
of the virus were carried face meetings, with digital
considers in its weighting
out: distribution of masks media being prioritized.
not only the free float of the
shares of the companies, but (common or face shields)
As a result of these
also the degree of efficiency to all employees (as well
as mandatory use in all actions, there was a drastic
of emissions of Greenhouse reduction in commuting and
Gases, identified through the units), availability of gel
alcohol, hygiene recurring business trips and trends in
analysis of the inventories digitization and remote work
emissions. of all furniture, equipment
and physical structures, were anticipated, which were
With this, BB has temperature measurement already underway before
demonstrated to the in all the Bank’s facilities the pandemic and which
market its commitment and the adoption of physical were intensified, in addition
to transparency, as well distance between people. to other possibilities. It is
as its willingness to seek expected that the result of
alignment with the best BB also implemented a these practices and trends
practices regarding business large-scale home office will reflect on the reduction
eco-efficiency and the and / or remote work for of BB’s GHG emissions in
contribution to a low its employees, prioritizing the coming years, mainly
those with comorbidities
carbon economy, consistent in Scope 3, precisely the
or who cohabit with
with the provisions of its most relevant and on which
family members in these
strategy and its Social the institution has less
conditions; reviewed
and Environmental interference. Although there
and improved processes,
Responsibility Policy. are still no quantitative
products and services;
provided services to and accurate data available
Covid-19 Pandemic about the full effect of
customers and the
Considering that the year population in general, as these actions, they will
2020 was severely affected far as possible, remotely. certainly be considered
by the covid-19 pandemic, a Approximately 86% of the in the improvement and
response to the risks arising employees of the general execution of BB’s corporate
from the pandemic was administration and 29% business strategy.You can also read
