09/21/2023 – 22:19
Until October 20th, the Ministry of Finance will receive contributions for the public consultation that aims to standardize definitions on sustainable activities. Starting this Thursday (21), suggestions about the Brazilian Sustainable Taxonomy, as these rules are called, can be sent through the Participa Mais Brasil website.
The rules will only be published in November 2024, but the government intends to present the general guidelines at the 28th United Nations Climate Change Conference (COP 28), which will take place in the United Arab Emirates in November. According to the Treasury, standardization is necessary to establish a common vocabulary on the topic and guide investors, regulators and the government on which sustainable activities can benefit from public policies.
According to the Undersecretary for Sustainable Development of the Ministry of Finance, Cristina Reis, the standardization of rules is necessary because currently each financial institution has its own criteria to define what sustainable activities are. “The idea is to build an interoperable Brazilian taxonomy [que possa ser operada] with other international practices”, he explained.
Another important point of the new rules, highlighted the undersecretary, is to combat greenwashing, as false ecological practices are called. “The new taxonomy will determine criteria for the transparency of information on sustainable financial activities to combat fraud [na concessão de incentivos]”, declared Reis.
Special advisor to the Ministry of Finance for sustainable issues, Rafael Dubeux explained that the initiative is important so that companies that carry out activities that are not considered sustainable receive investments and incentives aimed at not harming the environment and the climate.
The public consultation proposal contains 11 objectives for defining sustainable activities, seven of which are environmental and climate-related and four are social. To be considered sustainable, economic activities must contribute significantly to at least one of the defined objectives, not harm any of the other objectives and respect minimum environmental and social safeguards. Practices that contribute to the mitigation or compensation of environmental impacts or adaptation to global warming will have priority in the standardization of rules.
The seven environmental objectives are as follows: climate change mitigation; adaptation to climate change; protection and restoration of biodiversity and ecosystems; sustainable land use and conservation, management and sustainable use of forests; sustainable use and protection of water and marine resources; and transition to circular economy.
The four social objectives are generating decent work and increasing income; reduce socioeconomic inequality, considering racial and gender aspects; reduce regional and territorial inequalities in the country; promote quality of life, with expanded access to basic social services; and contamination prevention and control.
After the publication of the rules, in November 2024, companies will have just over a year to adapt, with the Brazilian Sustainable Taxonomy becoming mandatory from January 2026. The establishment of inspection criteria will be left for a later stage. The government has not yet defined whether it will be necessary to send a bill or whether it will regulate the rules only through infra-legal devices, such as decrees, ordinances and normative instructions.
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