BNDES and the Environment
Principles
BNDES regards the preservation, conservation and restoration of the environment as essential conditions to mankind.
The Bank assumes to be of fundamental importance complying with the ethical and environmental principles in the credit granting process, in view of the commitment to present and future generations.
BNDES realizes that investments in the environmental performance of productive and infrastructure activities are boosters of economic and social development. And it assumes the commitment to make available adequate resources for the promotion of environmental quality and environmentally sustainable activities.
Guidelines
In the accomplishment of its environmental policy, BNDES, coherent with its pioneering in dealing with environmental matters, realizes that the financial support to programs and projects should conciliate its Operating Policies to be in conformity with the environmental law in force.
Always operating positively and taking into consideration not only legal formalities, the Bank has a target of preserving the quality of life, the environment and the ecological balance.
The guidelines described below direct BNDES performance in the ambit of its policy towards the environment:
Promotion of ecoefficiency, by stimulating the use of cleaner technologies, the increase in energetic efficiency, the use of renewable resources, the prevention and control of pollution, the reduction of rejects, the restoration of natural resources, the recycling of materials and the operations with objectives purely environmental that may also contribute to improve the urban organization;
Development and permanent improvement of instruments to evaluate the credit environmental risk and the environmental analysis of projects, considering the concept of environmentally sustainable development;
Performance in preventive actions to environmental damages, supporting and stimulating projects and programs that define environmental liabilities;
Stimulus to the implementation of products and processes environmentally more adequate and to the adoption of environmental management systems throughout the productive chain, including large enterprises and their suppliers;
Promotion to the continuous development an environmental conscience in BNDES resulting in individual and collective attitudes environmentally responsible;
Strengthening of the set of information on the energetic and environmental profile of the economic sectors and the evolution of technological routes, with special attention to innovations in progress and in perspective;
Expansion of knowledge in general and environmental aspects relevant to the sectors supported by BNDES, through the organization of events, training and qualification programs for the technical staff, as well as the contracting of studies.
BNDES Environmental
Policy Instruments
Among the instruments of the National Policy of Environment (Law 6938/81), "(...) incentives to the production and installation of equipment and to creation of technology absorption, directed to improve the environmental qualify (...)" are those directly connected to BNDES performance. Other instruments of the Policy apply indirectly to the Bank's work, such as the environmental licensing process, impact evaluation, environmental quality standards, ecological zoning and the national information system on the environment.
The instruments that BNDES uses to implement and pursue the objectives of its Environmental Policy are:
financial support lines;
mechanisms to disclose BNDES environmental
performance;
internal procedures of environmental analysis of projects and
risk evaluation;
the organizational unit in charge of Environment and the
Environment Work Team; and
internal actions pursuing the commitment of BNDES
staff, in addition to being an example to other financial institutions and governmental
agencies.
Financial support lines
BNDES operation is performed by means of lines, programs and funds. Among the financeable projects and endeavors are the implementation, expansion, restoration and modernization of productive units, technological innovation and development, provision of services, investments in infrastructure and social investments.
Explicit or not, the potential environmental benefits coming from these projects and endeavors integrate the support that BNDES offers to improve the environmental performance of borrowers and environmental quality in general.
The environmental performance of BNDES, as the main long-term financing agent for Brazilian enterprises, allows combining the use of economic instruments with those connected to public power intervention, as the ultimate purpose to induce investments in environmentally sustainable activities.
Recognizing the importance of the environmental matter and the role to be performed by a development bank, BNDES Operating Policies assign a high level of priority to environmental operations, through specific conditions and rules under the Environmental Line.
Environmental Line
In accordance with the Operating Policies, the operations classified as environmental should receive special conditions.
Some projects fit into categories subject to specific rules under the Environmental Line, such as the case of energetic efficiency. However, in all sectors of economic activity there are opportunities for environmental investment, and the definition about a project's environmental merit will occur during the operating process.
Mechanisms for disclosure of BNDES environmental action
With the purpose of explaining to its clients, financial agents, civil society entities and citizens its commitment with the environment and with sustainable development, BNDES usually uses a disclosure through its Internet site, the press, annual reports, institutional publicity and other means, in accordance with the policy defined by its communication area.
Operating procedures
BNDES financial support is established in its Operating Policies, which define the basic conditions for financial support. In conformity with its Policy and Procedures, the Bank gives special attention to the environmental aspects related to the enterprise or the endeavor.
The phase of analysis considers specific sectorial standards; validity of licenses; and approval of environmental impact evaluations and other studies required by the legal provisions.
Aware of these aspects, the Bank may perform complementary studies and require additional information and, also:
recommend reformulation
of the project;
offer resources to strengthen mitigating measures; and
in extreme cases, refuse to grant financial support in face of the environmental
risk.
In case of Direct Operations, the operating procedures follow the flow below:
Eligibility of operations
Preliminary evaluation of the project's environmental aspects (Location, Environmental Impacts, Enterprise's Visions and Procedures, Licensing Status and Environmental Liabilities), based on the information presented by the enterprise in the Environmental Status, included in Annex 6 of the Consulting Letter;
Classification of the endeavor's Environmental Category. The classification may be assigned in accordance with the sector and type of activity, its location, size and environmental impact attributes related to the endeavor;
Preparation of eventual "environmental recommendations" for the phases of Analysis and/or Monitoring of the operation.
The Environmental Category established for the endeavor determines distinct procedures in the phases of Analysis and Monitoring of the operation, as table below:
Environmental
Category
Impact Extent and Risk
A Activity related to strong environmental impacts
risks, or regional reach risks. Licensing requires studies of impacts, preventive
measure and mitigating actions.
B Activity related to local or lighter environmental
impacts. Requires specific evaluation and measures.
C Activity does not initially
present environmental risk.
Analysis of operations
Evaluation of regularity with the environment agency and judicial pending;
Evaluation
of projects' energetic and environmental aspects, based on information obtained:
1. in the Eligibility phase;
2. based on the standard sectorial questionnaire
addressed by the enterprises;
3. based on BNDES Environmental Procedure Guides;
Evaluation of matters related to hygiene and work safety;
Request of the project's mitigating and/or compensatory measures.
Approval and Contracting of operations
Checking the projects environmental regularity, subject to the presentation of the Installation License and other environmental authorizations granted by the state environment agencies, or by the Brazilian Institute of Environment and Renewable Resources of Legal Amazonia [IBAMA], taking into consideration the approval by the Environmental Impact Studies and Evaluations;
Inclusion of possible conditioning factors of environmental nature selected based on requirements of the licenses obtained, or in complement of law requirements, if it is the case.
Monitoring of operations
Evaluation of the project's environmental regularity (The Operation License should be presented 180 days after the last disbursement portion) and the accomplishment of eventual mitigating measures, obligations in terms of behavior adjustment and requirements included in the agreement and in the Previous and Installation Licenses.
The Environment Work Team
Aiming at disseminating BNDES knowledge on the environment and strengthening the technical staff commitment with environmental matters, a Work Team was organized under a permanent nature to be the discussion forum for topics related to this subject, with the assignment to formulate and monitor BNDES environmental policy and which participants operate as liaison ties between the several sectors of the Bank and the Environment area.
Internal
Actions
BNDES commitment with the environment is also expressed in its internal activities:
Expansion of the knowledge on environment and sustainable development, by means of promoting training events and programs and qualification of its employees is one of BNDES permanent concerns.
In addition to the "Green Building " project, which aims at providing BNDES head office building with exemplary conditions with respect to aspects such as Air Quality, Energetic Inputs, Hydric Inputs, Environmentally Correct Materials, Work Safety and Occupational Hygiene, Ergonomic Features, Solid Residues / Collection Program and Building Automation, the Bank is permanently considering the adoption of internal measures with the purpose of defining a new environmental responsibility paradigm.
Other Commitments
In 1994, BNDES signed the International Declaration of Financial Institutions on Environment and Sustainable Development, and joined the United Nations Program for Environment - Financial Initiative [UNEP-FI]. As a result of its participation and constant interchange with UNEP-FI, BNDES keeps updated with modern environmental and sustainability procedures in banking operations for the global financial sector.
BNDES is also signatory of the Green Protocol - Commitment Letter for Sustainable Development, signed in 1995 by Banco do Brasil, Caixa Econômica Federal, Banco do Nordeste and Banco da Amazônia, whose general principles are as follows:
1. Environmental protection is an obligation of all those who wish to improve life quality in the planet and extrapolates any attempt of space-time consideration;
2. A dynamic and versatile financial sector is essential for sustainable development;
3. The banking sector should favor increasingly the financing of projects not aggressive to environment or those presenting sustainability characteristics;
4. Environmental risks should be considered in the financing conditions and analyses;
5. Environmental management requires adoption of practices that anticipate and prevent environmental degradation;
6. Participation of clients is indispensable in the conduction of banks' environmental policy;
7. Environmental laws and regulations should be applied and required, having the banks the duty of participating to the dissemination thereof;
8. Execution of environmental policy by banks requires the creation and training of specific teams within their staffs;
9. The elimination of waste, the energetic efficiency and the use of recycled materials are practices that should be stimulated at all operating levels;
10. The principles herein assumed should be a commitment to all financial institutions.
BNDES financing lines to support environmental projects
In order to best adequate BNDES financial support instruments, one of the priorities is the Environmental Line, which offers special conditions to environmental projects. There are projects that fit into categories subject to specific rules under the Environmental Line, such as the case of energetic efficiency, as well as there are general projects that may be characterized as environmental.
General
Projects: Characterization of Environmental Investments
Basic Sanitation
Projects on collecting, treatment and final disposition of industrial, commercial, residential and hospital solid residues. The projects should involve investments related to the closing of eventual garbage deposits (lixões) existing in the region.
Projects included in the Programs of Hydrographic Basin Committees
Implementation of collecting networks with adequate final destination and sanitary sewage treatment systems.
Management of hydric resources: management modernization, monitoring and improvement of information systems; services and processes directed to controlling and inspecting the different uses of water and to implementing initiatives in the environmental education area.
Ecoefficiency: Rationalization in the Use of Natural Resources
Reduction in the use of hydric resources: treatment, reuse and closing of circuits.
Reduction in the consumption of energy for producing goods and providing services.
Substitution of fossil fuels (diesel oil and gasoline) for renewable sources (biodiesel, ethanol, hydric, eolian or solar energy).
Increase in internal and external recycling of materials.
Voluntary use of cleaner technologies: systems of prevention, reduction, control and treatment of industrial residues, effluents and pollutant discharges.
Restoration and Conservation of Ecosystems and Biodiversity
Restoration of river-edge forests and erosion control.
Formation, restoration, maintenance, preservation, monitoring and compensation of Legal Reserve Areas and Permanent Preservation Areas.
Tourism projects contributing to the development of Integral Protection Conservation Units and Natural Property Private Reserves integrating the National System of Nature Conservation Units.
Research of Brazilian's nature substances for the development of pharmaceutical products, cosmetics and spices.
Clean Development Mechanism
Viability study, project preparation costs, Project Conception Document [PDD] and other costs related to the validation and registry process.
Planning and Management
Environmental or integrated management systems; qualification of enterprises' technical staffs and constitution of an organizational unit dedicated to environmental matters; environmental certification.
Environmental Impact Studies and respective actions aiming at preventing or mitigating environmental impacts.
Restoration of Environmental Liabilities
Restoration of degraded, mined or contaminated areas, such as: old depositions, deposits of solid residues or abandoned earth embankments, lending areas, discharges, liberation of liquids, oils and greases, percolation of harmful substances, contaminated water table, presence of amianthus or transformers with ascarids, modified areas subject to erosion and land collapses, salty land, Legal Reserve Areas and Permanent Preservation Areas degraded or used for other purposes.
Energetic
Efficiency Projects
Due to its role as main Brazilian agency for economic development and leading financier of economic sectors with high demand of energy, it is included in BNDES mission to promote sustainable development and energetic efficiency in Brazil, including the dissemination of these concepts and the stimulus to projects for fighting waste and rationalizing the use of energy.
The energetic efficiency may bring a series of benefits for the country, as highlighted below:
It allows an increase in enterprises' productivity and competitiveness.
It allows the postponement of investments needed for the generation, transmission and distribution of energy.
It allows a reduction in the risk of electric energy rationing by acting directly on the demand side.
In general the cost of energy saved for efficiency projects is lower than the marginal costs for energy supply and the energy tariff costs, which may provide benefits both to consumers and the national energetic system.
Minimizes the negative impacts that the production and use of energy cause to the environment.
As a contribution to the development of the Brazilian market for energetic efficiency projects, it was created a specific line for Support to Energetic Efficiency Projects [PROESCO]. This line is directed to two types of main beneficiaries: public or private enterprises (industrial, trading and/or services), which present projects for the implementation of equipment and procedures resulting in a higher energetic efficiency; and enterprises specialized in the preparation and implementation of energetic efficiency projects [ESCOs].