Sustainable Bonds Grow Among B3 Offers

Credits are an alternative to encourage the fight against climate change through investments

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Sustainable Bonds: Since 2018, B3 has been offering ESG-related products (Adam Gault/Getty Images)

Sustainable Bonds: Since 2018, B3 has been offering ESG-related products (Adam Gault/Getty Images)


Publicado em 9 de setembro de 2021, 16h16.

Última atualização em 21 de setembro de 2021, 11h47.

Brazil has become an interesting destination for investors looking for opportunities within the famous acronym ESG that represents the environmental, social and governance areas.

Since 2018, B3 has provided trading of these bonds, divided between green, social, sustainable, and linked to sustainability. The first issue of this type of bond took place in 2008 and is considered a milestone in the alliance between sustainability and profitability.

There is a growing recognition in the market that investing in sustainability can be good business. In response to this demand, over the past few years, financial instruments have been created whose function is to facilitate the raising of resources aimed at the green economy.

Green bonds, social and sustainable, serve as debt instruments issued by companies, governments or entities and are traded on the market to attract investments for projects that have practices related to sustainability as their objective.

Therefore, examples of green bonds would be those linked to climate change adaptation or pollution control, while social bonds can be related to job creation or the construction of affordable housing.

Bonds linked to sustainability that also function as debt instruments, are defined by B3 as those whose ultimate objective is to ensure that their issuer achieves targets linked to ESG and measured based on key indicators.

Depending on the success or failure of these commitments, the financial and structural characteristics of the bond may change. Thus, renewable energy can be adopted as an indicator, and, as a goal, to be set in 100% renewable electricity by 2025, for example.

Popularization of these titles is increasingly evident. In 2020, trading in this type of paper generated R$ 5.3 billion at B3, in the form of 18 issues carried out by 12 different companies. In the global scenario, the sale of green bonds exceeded US$ 263 billion in 2019.

To encourage the issuance of these bonds, B3 promotes debates on the subject. In addition, the stock exchange supports the Green Bond Transparency Platform for Latin America and the Caribbean, a pilot project by the International Development Bank whose objective is to increase the visibility of these credits and attract even more investors.

For Knut N. Kjær, manager of the Norwegian State Pension Fund, climate change is "the result of the biggest market failure the world has ever witnessed." Therefore, he says, investors should keep long term in mind.

Now, it is up to governments and companies to reverse the mistake made and, through investments and business, fight global warming.