Brazilian Central Bank launches sustainability agenda

. Sep 09, 2020
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Today, we cover the Brazilian Central Bank’s push for sustainability. Brazil’s plan to hold safe elections amid the pandemic. And a hiccup in a front-running potential vaccine trial.

Brazil’s Central Bank wants to go green

The Brazilian Central Bank announced

on Tuesday a new ambitious sustainability agenda, which will force financial institutions to quantify risks and opportunities associated with climate change. Their reports will have to follow the model set by the Task Force on Climate-Related Financial Disclosures (<a href="">TCFD</a>), a market-driven initiative set up to develop recommendations for climate-related financial risk disclosures in mainstream filings.</p> <ul><li>The bank also plans on creating a credit line based on ESG standards (environmental, social, and governance).</li></ul> <p><strong>Why it matters.</strong> If fully implemented, the Central Bank&#8217;s &#8220;green agenda&#8221; would make sustainability issues a key pillar of the Brazilian financial system.</p> <p><strong>Mapping risks.</strong> As our <a href="">August 11 Daily Briefing</a> showed, Latin American banks still fail to evaluate and quantify the financial impact climate change can have on their business. Banks have a particular blind spot when it comes to quantifying their clients’ financial exposure to climate hazards. Still, Brazilian institutions such as Itaú Unibanco and Santander were singled out in a recent UN report as being ahead of peers from neighboring countries.</p> <p><strong>Sustainability + Agribusiness.</strong> Otávio Damaso, the bank&#8217;s regulation director, talked about creating a &#8220;green bureau&#8221; for rural credit, which would make access to credit conditional on companies&#8217; respect for sustainability principles. Despite failing to provide much detail about how this bureau would work, Mr. Damaso says the goal is to enhance by 20 percent credit limits for operations which are judged as more sustainable.</p> <ul><li>Rural credit in Brazil is a BRL 200-billion-per-year industry, spreading across over 2 million operations.</li></ul> <p><strong>JBS.</strong> This weekend, we at <strong>The Brazilian Report</strong> showed a new report by think tank Chain Reaction Research, which focuses on sustainability issues, about the possible links between meat giant <a href="">JBS and the deforestation of at least 1.7 million hectares</a> of native vegetation in the Amazon and the savannah-like Cerrado biome since 2008.</p> <iframe src="" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <h2>How Brazil plans to hold safe elections amid the pandemic</h2> <p>Brazil&#8217;s Superior Electoral Court launched a sanitary plan to mitigate health hazards during the 2020 municipal elections —&nbsp;scheduled for November 15 and 29. The plan was elaborated by the Oswaldo Cruz Foundation medical research institute, alongside São Paulo&#8217;s two most-renowned hospitals: Albert Einstein and Sírio-Libanês. Brasília correspondent Débora Álvares explains the main changes:</p> <ul><li><strong>Voter identification. </strong>To reduce contamination, the Superior Electoral Court will suspend its flagship system against voter fraud: fingerprint identification. Voters will be only required to show their ID to poll workers —&nbsp;who, if necessary, can ask the person to step back and remove their mask.</li><li><strong>Adapting poll stations. </strong>The country&#8217;s 95,000 poll stations will be equipped with hand sanitizer (100,000 bottles for workers and over 1 million liters to be made available for voters). Floor signs will be designed to keep people socially distanced by at least 1 meter at all times. However, electronic voting machines will not be sanitized — due to worries that the process, if done incorrectly, could damage the devices and spoil thousands of votes.</li><li><strong>Protection.</strong> Facemasks will be mandatory for all — poll workers will be also provided with face shields.&nbsp;</li><li><strong>More time.</strong> The scheduled voting period will be extended by one hour — from 7 am to 5 pm. Authorities suggest earlier times to be demarcated for elderly voters and at-risk people.</li><li><strong>Absence.</strong> Brazilian citizens must justify their absence if they can&#8217;t vote. In 2020, this can be done through an app.</li></ul> <p><strong>Why it matters.</strong> By design, <a href="">Brazil’s electoral system</a> puts lots of people in the same place, in line, for several minutes (maybe hours). And voters will have to touch a voting machine hundreds of others have already touched the same day.</p> <ul><li>Unlike the U.S., where voters can mail their ballots, or France, where people can vote by proxy, voting in Brazil happens only through the traditional in-person system. And it is mandatory.</li></ul> <p><strong>To keep an eye on.</strong> Brazil should look to the Dominican Republic for precedent. The Caribbean country held an election in July. As our own Lucas Berti reported, <a href="">rules on masks and social distancing were not enforced</a>.</p> <p><strong>Bottom line.</strong> Only the 2 million voters registered in Brasília (including yours truly) are free from risk. The federal capital enjoys a state-like status and is run by a governor, not a mayor.</p> <iframe src="" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <h2>Oxford vaccine trials halted after possible adverse reaction</h2> <p>A phase-3 coronavirus vaccine trial has been put on hold due to a <a href="">suspected serious adverse reaction</a> by a participant in the UK. The potential vaccine, developed by British-Swedish pharmaceutical firm AstraZeneca and the University of Oxford, is being tested on thousands of Brazilians. According to the Federal University of São Paulo, 5,000 Brazilian volunteers have already taken the vaccine&#8217;s two doses and there have been no reports of adverse events so far.</p> <ul><li>In a statement, AstraZeneca said the company&#8217;s “standard review process triggered a delay to the vaccination trial to allow review of safety data.”</li></ul> <p><strong>Why it matters.</strong> This potential vaccine is a frontrunner in the race for immunization against Covid-19 —&nbsp;and Brazil has already bought 100 million doses. The country expected the first batch of doses to be ready for December, but the suspension of the trials might affect this timetable.</p> <p><strong>Government.</strong> The suspension of trials happened on the same day Brazil&#8217;s Interim Health Minister Eduardo Pazuello said a vaccine would be rolled out for <em>all</em> 211 million Brazilians by January 2021.</p> <p><strong>President anti-vaxxer?</strong> Meanwhile, President Jair Bolsonaro seems to be willing to spark an anti-vaccine movement in Brazil. Last week, he said nobody would be forced to take the vaccine —&nbsp;a message then relayed by the government&#8217;s official press service. On Tuesday, he said &#8220;one just can&#8217;t tie up a guy to give him a vaccine shot.&#8221;</p> <ul><li>Mr. Bolsonaro, however, could be going up against public opinion. An Ipsos-Mori poll showed that 88 percent of Brazilians would get a vaccine as soon as one is available.</li></ul> <p><strong>By the numbers.</strong> The coronavirus has already killed over 300,000 people in Latin America. Cases have exploded in Argentina and Peru in recent weeks —&nbsp;and the latter has the highest Covid-19 mortality rate worldwide. In Brazil, over 4.1 million people have been infected, and 127,000 have died of the disease.</p> <iframe src="" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Bolsonaro family. </strong>Prosecutors in Rio de Janeiro plan on presenting charges against Senator Flávio Bolsonaro, the president&#8217;s eldest son, on the week of September 21. He will reportedly be charged with <a href="">embezzlement</a>, money laundering, and criminal association for allegedly forcing his staff to surrender part of their paychecks during his stint as a state lawmaker. This practice, known as a “<a href="">rachid scheme</a>,&#8221; is common among politicians in Brazil.</li><li><strong>Fake news 1. </strong>Facebook has paid a BRL 1.92-billion fine (USD 358 million) for failing to fully abide by a Supreme Court decision. The social media firm had been ordered in May to <a href="">block 12 pro-Bolsonaro accounts</a> linked to the spread of false information for political purposes. The accounts were only disabled in Brazil, however, not worldwide. Despite already paying the fine, the tech giant is trying to overturn the decision. In July, President Jair Bolsonaro filed a lawsuit demanding for the accounts to be unblocked.</li><li><strong>Fake news 2.</strong> House Speaker Rodrigo Maia said on Tuesday that lawmakers are finalizing a new draft for a bill targeting individuals and corporations that finance disinformation attacks through social media — stating the text could be voted on by the end of the year. The Senate approved on June 30 one such bill, which was met with <a href="">heavy criticism from experts</a> for &#8220;treating all Brazilian netizens as potential criminals,&#8221; leading the House to create a committee to propose modifications to the bill. </li><li><strong>Corruption.</strong> Prosecutors presented corruption and money laundering charges against former Rio de Janeiro City Mayor Eduardo Paes. He is accused of receiving BRL 10.8 million in kickbacks from the Odebrecht construction group. Investigators reportedly mapped <a href=";utm_medium=email&amp;utm_campaign=newstarde">18 cash drop-offs</a> to former aides of the ex-Mayor made in 2012, when he was re-elected as mayor. The politician, who plans to run for City Hall again in November, claimed the probe was a &#8220;clear attempt at tampering with the electoral process.&#8221;</li><li><strong>Telecom.</strong> Despite the protests of Brazil&#8217;s four biggest banks, Oi Telecom shareholders approved a new recovery plan on Tuesday — based on the sale of some of the company&#8217;s key assets in order to reduce<a href=""> a debt now standing at BRL 64 billion</a>. In order to pay creditors, erase part of the debt, and be able to invest, Oi plans to sell mobile telephony and pay-TV operations, transmission towers, data centers, among other assets — keeping only its fixed-telephone and broadband operations.

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