Market Roundup: Eyeing foreign investors, Brazil launches ESG bond framework

Brazil launches ESG bond framework, hoping to attract foreign investors

In early September, the Brazilian government unveiled its sovereign ESG bond framework. It provides clear guidelines for issuing green debt securities in international markets aimed at directly contributing to the country’s sustainable development and environmental protection. According to the government, the framework aligns with the United Nations’ 17 Sustainable Development Goals.

ESG. Brazil’s Finance Ministry has set an ambitious goal: to raise up to USD 2 billion by year-end through the issuance of Brazilian debt securities with sustainability at their core. The Lula government expects the inaugural issuance to occur later this year, although the exact date remains uncertain due to market regulations.

Why it matters. According to Rafael Dubeux, special advisor to the Finance Ministry, the allocation of Brazil’s inaugural sustainable sovereign bonds will primarily benefit the Climate Fund under the oversight of state development bank BNDES. With it, he said, Brazil’s Climate Fund “could reach BRL 10 billion as early as 2024.”

How it will work. The Brazilian government pinpointed several environmental initiatives aimed at attracting investment across nine key categories. These include pollution prevention, greenhouse gas emissions control, support for clean transportation endeavors, investments in renewable energy, forest preservation and restoration, and others. 

• The framework outlines Brazil’s obligations, such as...