Brazil

The Plano Plurianual de Avaliao (2016) established some decarbonisation and SDG aspirations; however it also created new incentives for fossil fuel investment and failed to do much to curb deforestation. Government commitment to green economy remains weak, and its development strategy revolves almost exclusively around brown economic growth. The Bolsonaro government has shown no interest in decarbonisation, with funding for Brazil's national climate change plan slashed by more than 40% in recent years. In December 2020, Brazil submitted an updated NDC that effectively weakened its climate targets for 2025 and 2030, setting an "indicative goal" of reaching net zero by 2060. During the 2021 Leaders Climate Summit, President Bolsonaro announced Brazil's aim of achieving net zero by 2050 - but this remains unbacked by any concrete commitments.

Some public consultation on policy, and ambition to increase citizen participation for example through new digital interactive platforms to promote participation and data transparency. However, since 2019 the Bolsonaro government has abolished most committees and commissions for civic consultation, and substantially weakened public policy oversight. No evidence of policies to support inclusive corporate governance.

UN Brazil has published some strategic guidance on SDGs for businesses, and an SDG Board reports to the Presidents Office, but little concrete policy, and the attitude of the current government is largely hostile to the SDGs overall.

Comprehensive economic data, but no mention of physical, natural or intangible capital; nor a particular focus on natural resources. Some limited wealth accounting work underway on water and forest accounts, in partnership with the World Banks WAVES programme.

Some early discussions and announcements, but no effective frameworks or concrete policies. The few existing regulations designed to encourage green investment are poorly enforced, despite early green finance work by the Brazilian Banking Federation (FEBRABAN).

Some internal auditing by the Ministry of Finance, but green fiscal policy overall remains weak. Some private sector and central bank monetary actions, for example the launch of Green Bond Guidelines by the FEBRABAN. Current government support or policy ambition is almost entirely lacking.

The newly independent Banco Central do Brasil (BCB) recently announced wide-ranging, mandatory ESG regulations targeting banks - including risk management and disclosure, stress testing and scenario analysis. The new regulations are the result of a series of public consultations conducted under the 'Sustainability Component' of the BCB's new agenda, launched in 2021. Climate risk forms a central component, with the introduction of new definitions for climate-related physical and transition risks, as well as a requirement for large banks to report on these risks and conduct stress testing by July 2022. The bank has also strengthened definitions of social and environmental risks in banking regulation, introducing a pioneering new concept of environmental and social transition risks into ESG regulation - considered to be a world-first, and a move which sets Brazil apart as a leader in sustainable finance. The new definitions establish the criteria used for risk classification and require banks to incorporate this into their portfolio analysis. The Green Central Banking Scorecard ranks Brazil 6th among G20 countries for its financial policy.

No carbon trading in place, but some research was underway at the Finance Ministry. Brazils National Climate Change Policy, enacted in December 2009, aimed to promote the development of a Brazilian market for emissions reductions. However, the Bolsanaro government has signalled open hostility to climate policy in general and progress on carbon pricing is extremely unlikely.

Policies in place for a few high-impact sectors. National SDG Commission acts as a monitoring body for planning, however implementation and coordination is low and support for unsustainable projects continues. In addition the Bolsonaro government has massively weakened forestry policies, reversing a decade of progress in rainforest protection and agricultural reform.

National policy for Micro-Small and Medium Enterprises transitioning towards sustainability, including training and skills development, but the program does not include fiscal and financial support. No clear legal form has been established for social enterprise.

Brazil has formally committed to a reduction of greenhouse gases of 43% below 2005 levels by 2030 the only large developing economy to promise an absolute reduction in emissions. However, no quantitative carbon budget and no legally binding tools are in place to deliver this ambition. Furthermore, the current governments active hostility to climate policy means further progress towards carbon targets is extremely unlikely.

Renewable energy already contributes around 80% of Brazils electricity supply largely thanks to hydroelectric power. Current policy has goals for 2030 and 2050 but lacks detail; little or no policy to manage population displacement and environmental disruption from hydropower and biofuels especially the additional pressure on deforestation from biofuel plantation. Decarbonisation of transport and buildings substantial contribution to energy emissions is not clear.

There is a national plan for inequality reduction and insuring employment, with some detailed proposals. However, little policy directed at the creation of green jobs. Overall labour policies are heavily deregulatory, with labour rights diminished and unions weakened.

Some innovative programs have been developed in the recent past, such as the (abolished) Bolsa Verde scheme providing cash transfers to poor households in return for conservation work. The link between environmental issues and poverty is acknowledged in social welfare legislation, however funding and support for programmes has been slashed by current and previous governments. Future developments will need to be closely monitored.

The latest development strategy, the Plano Plurianual de Avaliao (2016) gives consideration to inequality reduction and inclusivity. However, the Bolsanaro governments hostility towards gender equality, indigenous rights, and socially marginalised/minority groups undercuts these commitments. Policy has been rolled back for example, transferring responsibility for certifying Indigenous territory from the National Indian Foundation to the Ministry of Agriculture, abolition of most committees and commissions for civic consultation, and substantially weakened public policy oversight. Requirements for impact assessment of policy is no longer clear.

Several innovative initiatives including Previdencia Rural, an old age pension provided to rural informal sector workers, the Bolsa Familia programme of conditional cash transfers for school attendance & vaccination. These programmes, and similar, are not supported by recent governments, and currently face being dismantled through funding cuts and cancelled several leading projects.

Strategies in place for SDG14 and 15, but the Bolsanaro government has systematically dismantled environmental laws, radically rolled back forestry protection, slashed conservation budgets almost to zero, and dismantled protection agencies. The pandemic provided further cover for the accelerated rollback of environmental policies, with the government releasing a decree opening up indigenous land to extractive industries, and defunding environmental monitoring and enforcement during this period. At COP26, Brazil signed the Glasgow Leaders Declaration on Forest and Land Use, which aims to halt and reverse forest loss and land degradation by 2030. Yet national statistics released surreptitiously after the conference show deforestation is accelerating rapidly, reaching levels not seen since 2005.

Being extremely well-endowed when it comes to natural capital Brazil has much to gain from developing accurate natural capital accounting systems, but is only in the early stages of design and data consolidation. Some pilot accounts have been released for water 2013-2017, biomass energy 2015-2018, and land 2000-2020 - using limited data, spanning relatively short time periods. The Brazilian Institute of Geography and Statistics was invited to participate in the Natural Capital Accounting and Valuation of Ecosystem Services project, and in 2017 commenced "methodological tests" to develop ecosystem accounting. As part of the programme, initial accounts for 'Land Use in Brazilian Biomes' and 'Endangered Species in Brazil' have been announced. Government commitment beyond the programme remains uncertain.

No current natural capital commission, or plans to create similar independent governance institutions

Some pilots of fiscal reform were underway, but the Bolsanaro administration has instituted an almost complete reversal of progress: for example, eliminating 95% of the Ministry of Environments budget for climate change related activities, and increasing subsidies for diesel.