ESG Thematic Bonds | B3

Several financial instruments have been created to enable the channeling of capital to finance sustainable economic activities, including the Green, Social or Sustainability and Sustainability-Linked Bonds.

The Green, Social or Sustainability Bonds are debt instruments issued by companies, governments and multilateral entities that are traded in the capital markets with the purpose of attracting capital to social and environmental related projects.

The Sustainability-Linked Bonds (SLB) are debt instruments whose objective is to ensure that the issuer achieves ESG targets, which are calibrated based on key performance indicators (KPIs). These bonds may have their financial characteristics adjusted depending on the achievement of pre-established ESG targets.

Brazil is emerging as a destination of special interest for ESG financial investments, providing an increasing opportunity for the evolution of this market locally.

Examples by type:

Green Bonds Climate change adaptation, Clean transportation, Eco-efficient and/or circular economy adapted products, production technologies and processes, Energy efficiency, Environmentally sustainable management of living natural resources and land use, Pollution prevention and control, Renewable energy, Sustainable water and wastewater management, Terrestrial and aquatic biodiversity conservation
Social Bonds Affordable basic infrastructure, Access to essential services, Affordable housing, Employment generation, and programs designed to prevent and/or alleviate unemployment stemming from socioeconomic crises, including through the potential effect of SME financing and microfinance, Food security and sustainable food systems
Sustentability Bonds Socio-environmental projects (Green and Social combined)
Sustentability-Linked Bonds Indicator: Emissions management / Target: reduce the intensity of GHG emissions by 15% until 2030, Indicator: Waste Management / Target: 97% recycled waste until 2025, Indicator: Renewable Energy / Target: Achieve 100% energy consumption renewable electric energy until 2022

For more information on the ESG Thematic Bonds guidelines, visit ICMA – International Capital Market Association website.

ESG Thematic Bonds at B3

Issuance of green, social or sustainable (social and environmental) bonds can be identified in our trading environment since November 2018. At the end of 2020, there were 20 instruments - 14 debentures and 6 agribusiness receivable certificates (CRAs) - identified in our systems, totaling an issue value of R$ 6 billion.

Within the context of B3's strategy, we are promoting debates and initiatives to demystify and foster more issuances locally in partnership with market organizations specialized on the theme.