Brazilian banks lose points and fail in their policies to combat climate change
On Tuesday 5th November Fair Finance Brazil launched the 10th edition of the policy assessment of the Guide to Responsible Banks. The study shows the ratings of the country's eight largest banks on 18 topics, such as climate change and consumer protection. However, with the exception of Banco do Brasil, all banks ratings decreased.
The overall average of the banks was 3.3. In other words, only 33% of the elements evaluated were found in the public documents of these institutions. The result shows a drop in relation to the previous edition, when the overall average was 3.8.
This finding does not, however necessarily suggest a rollback in the banks' policies. "The decrease occurred mainly due to the removal of automatic points of legislation that until then were granted. In the past, the methodology allowed the granting of automatic points if there was, in the country, a law that provided for what is evaluated in the specific element. However, as in many countries it is not possible to say that compliance with the law is the rule, as is the case in Brazil, a methodological change allowed the removal of these points of legislation. With this, it is expected that financial institutions will incorporate stricter criteria in socio-environmental and climate matters in their policies (and practices!), in accordance with (and going beyond) the legislation", explains the coordinator of Idec's Sustainable Consumption Program, Julia Catão Dias.
The scenario is however more worrying when it comes to banks' investment portfolios. "Although there are some policies aimed at mitigating social and environmental impacts in the granting of credit and project financing, the same is not observed in relation to the investments of the bank's own resources and the investments managed by them. In other words, when it comes to investment, there are almost no policies that reinforce the commitments of financial institutions to socio-environmental and climate safeguards", says Idec's Research Analyst, Karina Feliciano.
Despite the low performance, for the first time, the Animal Welfare theme has achieved points since its implementation in the Guide in 2022. BTG Pactual bank was responsible for removing the issue from the zero margin. However, it is still expected that it, and all other banks, will increase policies so that they meet all the elements necessary for the maximum score in the theme.
See here the bank rankings
