Publication / 02 Feb 2015

Natural Capital Risk Exposure of the Financial Sector in Brazil: Full Report

Trucost was commissioned by GIZ and CEBDS to provide Brazilian financial institutions with an understanding of the relevance and magnitude of the natural capital risks they are exposed to through their funding and investments.

Brazil’s financial sector is dependent on natural capital to support economic growth and ensure future returns for investors. Nature’s assets are abundant in Brazil, from its farmland, forests and energy reserves to its ecosystem services such as the rainforest which helps regulate weather patterns.

However, there is mounting demand and supply side pressures on natural capital, including a rapidly growing population and deforestation. This renders natural capital increasingly scarce, leading to reduced crop yields, increasing input costs and disruption to supply chains. At the same time, there are financial and reputational risks for high-impact, high-dependence companies from the Brazilian government’s strengthening legislation to make companies pay for their environmental impacts and make banks more accountable for their financing decisions.

Investors and credit analysts are in need of better data and tools to integrate natural capital risks into investment and financing analysis in order to protect returns in the future. At the same time, there exists an opportunity for the financial sector to capitalise on the growing market for more sustainable and resource efficient business models. This study finds that the unpriced natural capital costs of companies which Brazilian financial institutions are financing amounts to R$1,646bn. Even if companies had to internalise only part of this cost, shareholder returns and loan repayments would be affected.

18 June, 2020
Events Building Best in Class ESG Practices’ – Webinar

In this Webinar we will take a look at how global banks and asset managers can build best practices around data quality, assessment frameworks and risk modelling. Christopher Perceval – Director and Head of Business Development EMEA at Trucost, part of S&P Global will be speaking at this event. For more info or details...

Find out more
16 June, 2020
Events ESG Disclosure and Due Diligence:  Through the Lens of Equity Capital Markets – Webinar

AFME’s first sustainable finance webinar will explore the increasingly important topics of ESG Disclosure and Due Diligence and more specifically, what they mean for Equity Capital Markets. With the support of our co-hosts, Allen and Overy, we’ll be using their planned report as a foundation to discuss further implications, challenges and projections around these...

Find out more
28 January, 2020
Events Uncovering Business Value from Environmental, Social and Governance Factors, Webinar, 28th January 2020

More than ever companies are measuring and disclosing their performance around environmental, social and governance (ESG) issues. By doing this, companies are able to reduce financial risks and uncover business opportunities. Moreover, record amounts of capital are flowing towards companies who do good. In this webinar you will learn: • The current sustainability landscape...

Find out more

VIEW ALL NEWS & INSIGHTS