2018 Brasil Lab instrument Responsible Commodities Facility announced a plan to provide US$1 billion over the next four years to fund the production of more than 180 million tonnes of responsible soy and corn in Brazil. With support from the UK Government’s programme Partnerships for Forests and a collaboration agreement with the UN Environment (UNEP), the financing instrument will offer aditional credit lines to soy and corn farmers who commit to using abandoned pasture lands, and avoid clearing forests and native grassland for agriculture. The project was recently featured in an article on the Financial Times, also published in Portuguese on the Brazilian newspapers Valor and Folha.

Read the original press release from Responsible Commodities Facility here.


Financial Times: $1bn green bonds to boost sustainable Brazilian farming launched
By Emiko Terazono, July 4, 2019

A financing programme for sustainable commodities backed by green bonds aimed at supporting Brazilian farmers and avoiding the clearing of the country’s grasslands is being launched in London today.

The Responsible Commodities Facility plans to provide low-interest credit lines to Brazilian soya and corn farmers who commit to avoid clearing forests and native grassland for agriculture and use degraded pasture lands.

Backed by the UK government and the UN, the programme will be managed by Sustainable Investment Management (SIM), a boutique environmental finance firm created by banking, commodities trading and environmental finance experts.

SIM will arrange $1bn in green bonds over the next four years, which is expected to result in 180m tonnes of responsible soy and corn, worth around $43bn in the first decade. The first $300m bond issuance is planned for the planting season of 2020.

Rising demand for soyabeans could result in the conversion of more than 6m hectares of Brazil’s Cerrado, or savannah, during the next 10 years. Farmers, commodities traders and food companies have been seeking a way to prevent clearing of the savannah without depriving farmers of potential income.

“The Responsible Commodities Facility is an opportunity for the market to ensure increased production without contributing to land clearance, which is resulting in the loss of natural habitats, loss of biodiversity and greenhouse gas emissions.” said Pedro Moura Costa, SIM chief executive.

The country has pledged to reduce emissions by 43 per cent by 2030, with almost 90 per cent of this reduction expected to come from reduced deforestation, yet existing funding mechanisms are unlikely to help meet this target, according to SIM.

The facility is seeking to protect or restore 1.5m hectares of natural habitat in the Cerrado, leading to an estimated emissions reduction of 250m tonnes of carbon dioxide.