The Banco Central do Brasil (BCB) added sustainability as one of the core pillars of its Agenda BC#, the bank’s work agenda focusing on structural issues of the financial system.
Introducing the measure, Fernanda Nechio, Deputy Governor of the BCB, warned of climate risk to financial stability. “Increasingly frequent climate shocks – wildfires, droughts, floods, extreme temperatures – affect relative prices in the economy,” she said. “In order to fulfil the Central Bank of Brazil’s mandate of price stability… we must prepare and respond appropriately to these structural changes in the economy.”
The BCB’s new sustainability agenda includes the creation of a ‘green liquidity facility’ and the use of sustainability criteria in the management of international reserves and investments. The Bank will also examine how the recommendations from the Task Force on Climate-Related Financial Disclosures can be incorporated into its prudential regulatory framework.
Other measures include the creation of a green rural credit bureau based on an open banking framework and the annual publication of a socio-environmental risk report.
The announcement was accompanied by an extensive presentation of the new agenda by BCB Governor Roberto Campos Neto and three Deputy Governors. “We want to debunk the myth that sustainability curbs productivity. On the contrary, it stimulates productivity and growth,” Neto said. “We want to show investors that the central bank is concerned about this, that it is related to our mission.”
This page was last updated April 23, 2021
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