Brazil is ready to take the lead in the climate finance agenda

The 30th Meeting of the Conference of the Parties, the United Nations Climate Change Conference, had Brazil gaining an important position, having performed a key role in the global climate agenda. The achievements of the conference held in Belém are countless, and it will be known for leveraging concrete actions to combat climate change and becoming a watershed. 

One of these achievements was the Belém Political Package, approved by 195 countries, that established, among other measures, an ambitious goal: triple the funds that wealthy countries allocate to developing countries to mitigate climate impacts – the so-called adaptation finance. The goal is to increase from US$40 billion per year in 2025 to about US$120 billion per year in 2035. 

Another achievement was the Global Implementation Accelerator, included in the package. This initiative involves international cooperation and funding to provide support to countries in their own journeys to honour the Paris Agreement. The intention is to boost climate actions with the greatest potential, to speed up the fulfilment of the goal to limit global warming to 1.5°C above the pre-industrial level. These and other initiatives also include a finance mechanism to bring about transitions that are just and inclusive, carried out in an equitable manner and with the guarantee of rights.

The Tropical Forests Forever Facility (TFFF), proposed by Brazil and launched during COP30, is a celebrated legacy. With an innovative model - funding from government and investors - it invests in market assets and channels excess returns to reward countries that maintain standing tropical forests - upending the compelling logic that deforestation is more profitable than conservation. The TFFF materialised Brazil’s vision of transforming the protection of forests into an economic asset. At the end of the conference, it had US$6.7 billion in announced contributions, besides the formal support of 66 countries at its launch.

The recovery of damages caused by climate change also took centre stage at the conference. With funding since 2023, the Fund for Responding to Loss and Damage launched in Belem its first call for funding requests, providing a total of US$250 million in donations for projects in the years 2025 and 2026. The goal is to strengthen the adaptation capacity of vulnerable countries and local communities, responding to emergencies, such as sea level rise, dislocations and rebuilding needs.

A market ready to take action

The implementation of financial structures to respond to the climate crisis and materialise everything that was planned at COP30 will be crucial for the adaptation processes of societies, businesses and nations. Trillionaire goals will have to be funded, opening up opportunities for structures such as blended finance, which uses catalytic capital (funds from the public sector, multilateral or philanthropic organisations) to increase private capital - provided by investors and financial institutions. Concerning business, the products and services that reconcile value creation and economic growth and the planet’s health will be in the sights of global portfolios engaged with sustainability. Sustainable securities and funds, dedicated to initiatives on renewable energy, valuation of sociobiodiversity and conscious consumption, will be used more as vehicles to reverse the several changes in the Earth’s climate. 

In view of this huge global challenge, the Brazilian capital market is ready to take action. It is the main market in Latin America and ranks among the ten largest in the world of investment funds. According to the April 2026 data from the Brazilian Financial and Capital Markets Association (Anbima), over 45 million accounts invest in these products, with 33,000 active funds, totalling about US$2.2 trillion in assets under management. 

In the past five years, hundreds of businesses were funded by the capital markets of Brazil, with issues over US$583 billion in fixed-income, hybrid and equity securities. With instruments like infrastructure debentures, thematic Receivables Investment Funds (FIDC) and ESG targets-linked securities (environmental, social and governance issues), it is possible to fund sustainable projects in several fronts: renewable energy, sanitation, green logistics, sustainable agribusiness, among others.

The federal government is another relevant actor. It currently channels funds to at least two initiatives for promoting sustainable investments: the Climate Fund, which aims to support national projects aimed at the transition to a higher sustainable and resilient economy, to reduce the negative impacts on environment; and EcoInvest Brasil, which aims to attract foreign investment and channel them to businesses that are strategic to the green industry, providing instruments to hedge against currency volatility. Both funds rely on Treasury funds and are managed by the Brazilian Development Bank (BNDES).

Clear and modern legal framework

The Brazilian regulatory framework is also an international benchmark. The Brazilian Securities and Exchange Commission (CVM), the capital market regulatory body that was the first in the world to require the mandatory adoption of the standards issued by the International Sustainability Standards Board (ISSB), which set global financial reporting standards in sustainability (IFRS S1) and climate (IFRS S2). 

To mitigate greenwashing and foster sustainable investments, the federal government is developing an official system, the Brazilian Sustainable Taxonomy (TSB), which classifies economic activities, projects and assets based on scientific criteria that recognise whether they are effectively integrated with environmental, social and governance principles. This measure, aligned with the standardisation according to the ISSB, allows for increased transparency and improved comparability of information between issuers from different countries, attracting local and foreign investments. 

Moreover, since the end of 2024, Brazil introduced a law that structures and provides for the regulated carbon market called the Brazilian Emission Trading System (SBCE). The legislation establishes the purchase and sale of authorisations for greenhouse gas emissions, allowing businesses whose emissions are within the established allowance to sell allowance surplus to those that have an allowance deficit. The system is in the first phase of implementation, focused on regulation and planning, and will soon be in full operation. 

The carbon market is, by the way, a matter considered important to Brazil. During COP30, the country announced the Open Coalition for Carbon Market Integration, an initiative that aims to link carbon credit trading systems from around the world, harmonise standards, boost liquidity and preserve the system’s integrity. Under Brazilian leadership, the coalition had the voluntary adherence of a total of 17 countries - including China, the United Kingdom, Canada and Germany – besides the European Union.

Supervision and self-regulation

With regard to self-regulation, established by Anbima, a set of rules aims to provide security and transparency to investors interested in sustainable assets in Brazil. Investment funds whose aims are self-declared as sustainable can use the IS suffix in their name (IS stands for sustainable investment in Portuguese). Meanwhile, those that consider ESG criteria in the management process may include the phrase “this fund considers ESG issues in its management” in sales materials for investors. The identification, provided for in a regulation issued by CVM, was created by institutions of the local market, to be followed by the market itself, and is aligned with international rules in effect, adapting them to the local scenario. 

Similarly, the public offerings of fixed-income securities focused on sustainability are closely followed by the Association. A guide to public offerings of ESG securities establishes the best practices for issuing these securities, in accordance with the standards established by the International Capital Market Association (ICMA). In 2025, these good practices were incorporated into the self-regulation, making the rules mandatory and subject to supervision.

Beyond funding, climate insurance and risk management are also crucial in view of the increase in extreme events and the impacts that they have on production chains. Incorporating resilience solutions into the business environment is essential to protect assets, reduce vulnerabilities and ensure financial stability. This need increases the appeal of Brazil further, which has a mature and consolidated financial and insurance industry.  

Furthermore, Brazil has a huge potential for nature-based solutions. With nearly 500 million hectares of forests, the country has the largest tropical forest area in the world, the Amazon, a biodiversity sanctuary for millions of plant and animal species and influences the climate of the whole planet.

Promising pathway

The figures clearly show that the interest in sustainable investments is no longer a promise and became a reality. The substantial increase in net assets and funding of sustainable funds, the resilience of ESG security issues even in an unstable geopolitical scenario and the strengthening of government instruments such as Eco Invest Brasil and Climate Fund reveal a local market in continued expansion. It is a rare combination: growing appetite for assets aligned with sustainable transition and a solid financial architecture that rapidly evolves to provide security, scale and liquidity to these investments.

Strengthened by the legacies of the Climate Conference, the vast potential for nature-based solutions and a capital market that is increasingly sophisticated in ESG, Brazil is ready to channel global funds and take the lead in transition finance for a sustainable economy. This is a historic opportunity and the window is open.

The challenge is clear now: transform engagement into business, intention into fundable projects, and ambition into actual impact.

The Brazilian capital markets understand the size of the challenge and, more than participating in the transition, are ready to lead it and make a difference in this global journey.