The Brazilian sustainable debt market is worth 9 billion dollars, including issues between 2015 and February 2021. Of this amount, the green titles account for 84%, followed by sustainable bonds with 15%. And, finally, social bonds represent 1%, according to data collected by the Climate Bonds Initiative at the request of EXAME.
These bonds are used to make it possible to raise capital to finance sustainable economic activities. They can be issued by companies, governments and multilateral entities and are traded on the capital markets.
In this universe, there are also “sustainability-linked bonds” (SLB), which are debt instruments whose ultimate goal is to make the issuer reach targets ESG.
Recently, the Brazilian multinational JBS, second largest food company in the world and leader in the protein sector, issued 1 billion reais in SLB. Debt securities are linked to the company’s commitment to reduce its greenhouse gas emissions. It is the first operation of this type (SLB) for a company in the sector.
In March of this year, by the way, JBS announced your global commitment to become Net Zero until 2040, including all scopes of issue: 1, 2 and 3.
The operation with JBS’ SLBs came out with a yield of 3.75% per annum and an annual coupon of 3.625%. The bonds mature in 2032, with intermediate targets to be met by the multinational from 2025. If they are not met, the interest paid to bondholders increases by 0.25 percentage points per year.
The issuance of JBS bonds is coordinated by Santander, Barclays, Bradesco BBI, BTG Pactual, Mizuho and XP.
Adaptation to climate change, conservation of terrestrial and aquatic biodiversity, green buildings, energy efficiency, renewable energy, sustainable management of water and wastewater, Eco-efficient and/or adapted products, technologies and production processes for the circular economy, pollution prevention and control , clean shipping.
Social bonds (Social Bonds)
Access to essential services, job creation and programs designed to prevent or alleviate unemployment arising from the socioeconomic crisis, including through the potential effect of SME and microfinance financing, affordable housing, affordable basic infrastructure, food security and sustainable food systems .
Projects with a socio-environmental character (Green and Social combined)
Emissions management with a goal of reducing the intensity of GHG emissions by 15% by 2030, waste management with a goal of having 97% of waste recycled by 2025, renewable energy with a goal of reaching 100% consumption of renewable electricity by 2022 .
* Definitions elaborated by B3