Financial institution intends to create specific trading desk for new asset
O BB (Banco do Brasil) this week purchased 5,000 carbon credits from Envira Amazonia Projectoperated on the secondary market by the French bank BNP Paribas, and sold to Standard Chartered Bank abroad. It was the first time in history that the institution traded carbon credits on the international market.
According to BB, the pilot transaction served as a test to validate BB’s new business model.
Certified by Verra, the main evaluator of the voluntary carbon market through reductions in deforestation and degradation, the Envira Project protects more than 200 thousand hectares of the Amazon Forest. The program also has the CCB (Climate, Community and Biodiversity) seal, which certifies the allocation of part of the credits produced for the benefit of the local community.
The bank intends to become a reference in carbon market negotiation, from the development of credit-creating projects to the purchase and sale of these assets. It also wants to offer advice on carrying out inventories of greenhouse gas emissions. According to the bank, the projects supported by the institution allow the preservation of more than 500 thousand hectares of native forest.
At the beginning of the month, BB created a strategic unit exclusively dedicated to good environmental, social and governance practices in its structure to reinforce its operations in the area. Aligned with the 12 commitments for a more sustainable future, especially reforestation and forest conservation, the institution has the goal of conserving or reforesting 1 million hectares by 2025.
Expansion
In 2022, the global market for voluntary carbon credits reached US$2 billion and is expected to grow exponentially in the coming years. In the Brazilian case, the consultancy Way Carbon, specialized in the segment, estimates that the volume of negotiations will reach US$ 20 billion by 2030.
Through the carbon credit market, companies compensate for greenhouse gas emissions. Each company has a certain emissions limit. Those that emit less are left with credits, which can be sold to those that have exceeded the limit. The carbon credit is equivalent to 1 ton of carbon dioxide or other greenhouse gases that are no longer released into the atmosphere.
Companies can also buy carbon credits through financing environmental or sustainable development projects. Carbon markets have gained more emphasis since the signing of the Kyoto Protocol in 1997 by countries in the UN.
With information from Brazil Agency.
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