Green Bonds, or green securities, are fixed-income investments that have been gaining prominence in the global market due to the growing environmental awareness. These bonds have become a way to align investments with sustainability.
But before delving into the topic, it is important to understand what a debt security is. In Brazil, they are known as debentures or financial notes, while abroad, they are called bonds. The operation is simple: the investor “lends” money, and upon maturity, receives the invested amount plus the interest defined in the issuance terms.
What are Green Bonds and why are they important?
Green Bonds are financial instruments used to raise funds exclusively for projects with clear environmental benefits. These bonds aim to help reduce the impact of climate change, promote the preservation of natural resources, and encourage sustainable development.
What differentiates them from traditional fixed-income securities is the obligation to allocate funds to sustainable initiatives. Common examples include projects related to renewable energy, energy efficiency, sustainable transport, waste management, and environmental conservation. This characteristic makes Green Bonds not only a financial solution but also catalysts for socio-environmental change.
Additionally, another key aspect is that, beyond receiving interest payments, investors monitor whether the environmental goals associated with the bonds are being met. If these goals are not achieved, the terms may include additional payments as compensation.
What can be financed by Green Bonds and Green CRAs?
One of the main characteristics of Green CRAs is, without a doubt, the allocation of funds to finance or refinance agribusiness projects that bring significant environmental benefits. This specificity makes these bonds essential for encouraging more sustainable practices.
Eligible activities for financing include:
- Low-carbon agriculture;
- Use of biofertilizers;
- Technological innovations in pasture management;
- Composting for agro-industrial waste treatment;
- Localized spraying for resource optimization;
- Implementation of agroforestry systems;
- Restoration of degraded areas;
- Forest planting;
- Animal waste treatment;
- Biofuel production;
- Agricultural and livestock environmental certifications.
These examples highlight how Green Bonds and Green CRAs are indispensable tools for financing the transition to a more sustainable agribusiness. Furthermore, they align with the global environmental commitments of the Paris Agreement and the United Nations Sustainable Development Goals.
The benefits of Green Bonds
Beyond contributing to sustainability, Green Bonds offer considerable benefits for both issuers and investors:
– Access to new investors: The growing demand for sustainable investments attracts specialized funds, family offices, and institutional investors committed to ESG practices.
– Improved reputation: Issuing green bonds positions companies as responsible and committed to global transparency and sustainability standards.
– More attractive rates: In some cases, Green Bonds offer better financing conditions due to the growing investor interest in sustainable projects.
– Contribution to sustainable development: Beyond financial gains, these bonds promote more ethical and sustainable practices in both the public and private sectors, aligning with global demands.
Brazilian Market
In Brazil, Green Bonds began gaining relevance in 2015. Since then, the market has been evolving consistently but still holds vast growth potential. The agribusiness sector, for instance, which accounted for approximately 21.8% of the national GDP in 2024, stands out as one of the most promising sectors for applying these financial instruments.
The issuance of Green CRAs, a category of green bonds focused on agribusiness, has been established as an efficient tool for financing sustainable agricultural practices.
Why is Fortesec the ideal partner?
At Fortesec, we specialize in transforming assets into strategic solutions. If you are looking to structure a sustainable project and raise funds through Green Bonds or Green CRAs, our team is ready to support you. Contact us now to learn how to finance your project and contribute to a more sustainable future.
