Three Brazilian public banks – the National Bank for Economic and Social Development (BNDES), Banco do Brasil (BB) and Caixa Econômica Federal – and the Inter-American Development Bank (IDB) announced this Thursday (25) the bases of a new proposal aimed at financing sustainability in the Amazon. The idea is to create a Exchange Traded Fund (ETF), a fund traded on the stock exchange. The expectation is to launch it and distribute its shares before the 30th United Nations Conference on Climate Change (COP 30), scheduled to be held in the city of Belém in November 2025.
ETFs are a type of investment that emerged in the United States at the turn of the 1980s and 1990s and are now common in capital markets in different countries. The proposal presented foresees that trading will take place on the São Paulo Stock Exchange, also known as B3.
The ETF’s investment portfolio will consist of fixed-income securities issued by BNDES, BB and Caixa. The return offered to investors will be based on a benchmark index to be created. This index must be accepted by the Brazilian Securities and Exchange Commission (CVM). All funds raised by the three institutions will be allocated to loans for sustainable actions in the Amazon.
The announcement was made by leaders of the financial institutions involved during the 3rd meeting of Finance Ministers and Central Bank Governors of the G20, which is taking place in Rio de Janeiro. It is yet another activity of a intense programming which takes place throughout this week in the capital of Rio de Janeiro, coordinated by Brazil, which currently presides over the G20.
On the occasion, a letter of intent was also signed between the institutions involved. Studies to develop the proposal will be conducted collaboratively by BNDES, BB and Caixa, with technical and financial support from the IDB. “The Amazon for All ETF will seek to democratize access to sustainable investments, combining the use of resources with results-based incentives and promoting diversification and expansion of the investor base in domestic and international markets,” states a note released by the economic institutions.
There were several reasons why ETFs were considered suitable instruments for financing Amazon stocks. One of them is transparency, since the composition of the portfolio is disclosed daily by the index provider, allowing investors to know exactly which assets they are investing in. In addition, the widespread use of ETFs in the international market tends to facilitate distribution through global investment platforms.
Another point mentioned is the democratic bias. “The instrument was chosen as a vehicle for raising funds because it allows equal access to small and large investors, and because of its liquidity, since the shares are listed on stock exchanges. It is estimated that they will be accessible for purchase and sale by any individual or legal entity, with values around R$100”, adds the text released by the institutions.
