Articles
At Banco do Brasil (BB), we seek to mitigate risks to the environment and society and reduce the impacts of its financing and investments. We also look to identify new opportunities to operate in the sustainable business value chain, based on relevant socio-environmental issues and strategic topics for sustainable development.
All credit and financing operations are aligned with the principles of socio-environmental responsibility contained in general and specific policies, including the Specific Socio-Environmental Responsibility Policy (Política Específica de Responsabilidade Socioambiental – PRSA), the Specific Credit Policy, BB’s Sustainability Guidelines for Credit and the Socio-Environmental Guidelines for Controversial Issues.
The PRSA bases socio-environmental responsibility on strategic definitions, in line with the laws and regulations that govern the subject. The Specific Credit Policy considers the socio-environmental responsibility of the counterparty in decisions on operations with credit risks and the BB Sustainability Guidelines for Credit use socio-environmental criteria in the processes of credit limit analysis and in the of financing to projects, considering their potential impacts and risks and the adoption of mitigating and compensatory measures. The Socio-Environmental Guidelines for Controversial Issues reinforce our actions on behalf of society with regards to relevant socio-environmental issues and issues considered strategic.
a) The Equator Principles
As a way to mitigate socio-environmental risks, we analyze projects based on the Equator Principles. In 2018, we had three Project Finance operations, which are projects with total capital costs of equal to or greater than US$10 million.
Below we present some cases of projects that were considered within the framework of the Equator Principles. In all cases, our monitoring is carried out by independent consultants.
Case 1: Project in the heavy construction sector considered within the framework of the Equator Principles. Potential impacts presented included the need to resettle people, suppress native vegetation and noise emission. At the beginning of the works the company identified the presence of historical heritage in the area. As a result, during the operation and after analysis of the documentation sent by the customer, we required measures to protect the historical heritage and an action plan for the management of other impacts, to meet and comply with the Equator Principles and the Policies and Guidelines adopted by the Bank.
Case 2: Project in the energy sector, considered within the framework of the Equator Principles. Potential impacts included the suppression of vegetation, an increase in the local population and demand for public services, with modification of the local landscape and fragmentation of habitats. To mitigate these impacts, the customer is following an action plan to comply with the Equator Principles and is aware that future disbursements are conditional on compliance with the Equator Principles, as well as compliance with the Specific Socio-Environmental Responsibility Policy and BB’s Sustainability Guidelines for Credit.
Case 3: Project in the port sector, considered within the framework of the Equator Principles. Presented potential impacts on aquatic life, water quality and the temporary displacement of employees. During the course of the works, complaints were received from the local population regarding the absence of signaling and the high speeds of construction vehicles. During the operation, we analyzed the action plan sent by the customer and, in order to mitigate these occurrences, we demanded actions to improve signaling in the area surrounding the project and the installation of speed bumps. This met the requirements and complies with the Equator Principles and the Socio-Environmental Responsibility Policy, the Credit Policy and BB’s Sustainability Guidelines for Credit.
Case 4: Project in the electric energy sector, considered within the framework of the Equator Principles. Presented impacts related to the displacement of workers and threats to habitats and biodiversity. During the course of the operation it was also observed that there was an absence of complaints mechanisms, as well as a lack of assessment and identification of ergonomic risks for the workers. In order to remedy these observations, we required the implementation of certain actions by the customer, which are being implemented in order to comply with the Equator Principles and the Socio-Environmental Responsibility Policy, Credit Policy and BB’s Sustainability Guidelines for Credit.
b) Suspension of Financing
Case 1: When we verified that a customer had violated Human Rights standards and had been published in the Ministry of Labor’s Registry of Employers that submit workers to conditions analogous to slave labor, we suspended their credit limit. This prevented the release of loan and financing installments. This procedure is in accordance with the Specific Credit Policy, the Socio-Environmental Guidelines for Controversial Issues (group 1 – Activities not Served) and with BB’s Sustainability Guidelines for Credit.
c) Other Financing
Case 1: During analysis for granting an agricultural production costing loan for a customer in the State of São Paulo, we requested presentation of the environmental operating license, as well as the water use permit, issued by the competent environmental agency. With the documentation, we decided to grant the loan. This procedure is in accordance with the Specific Credit Policy, with the Socio-Environmental Guidelines for Controversial Issues (group 3 – Alert List) and with BB’s Sustainability Guidelines for Credit – which requires environmental licensing and water use permitsfor activities and projects financed by us, when applicable.
Case 2: For financing of a project in the energy sector, we requested that the customer provide all necessary environmental documentation (licenses and water use permits), as well as the Environmental Impact Study (EIA) and the Environmental Impact Report (Rima). The customer attended the requirements established by the environmental agency, so we contracted the operation and periodically monitor the customer’s performance in relation to the environmental impacts of the project and the mitigation actions adopted. These procedures are in accordance with the requirements of the Specific Credit Policy and the Socio-Environmental Guidelines for Controversial Issues (group 2 – Restricted Activities).