DF Brazil
On June 21, 2022, the organization Conectas Direitos Humanos initiated a public civil action against BNDES (Brazilian Development Bank) and BNDESPAR (BNDES' subsidiary responsible for managing equity stakes in several Brazilian companies). Conectas requested the granting of various precautionary measures, arguing that the defendants lack rules or protocols for assessing the impacts of their investments on exacerbating the climate crisis.
According to Conectas, this translates into a breach of the commitments Brazil made under the Paris Agreement and the National Climate Change Policy (PNMC), among others. Furthermore, based on two technical opinions, Conectas requests that the court order BNDES and BNDESPAR to create rules and mechanisms linking their investments and divestments to the reduction of greenhouse gas emissions from the companies they finance.
Conectas notes that this is the world's first climate-related civil action against a national development bank. While the publicly owned BNDESPar operates under an Environmental and Social Policy for Capital Markets that prohibits supporting companies with a history of environmental crimes and modern slavery, this policy does not include climate criteria.
Conectas requests that the court order the defendants, as a matter of urgency:
Report publicly, within 30 days, on the adoption of climate criteria in investment and divestment decisions and on the monitoring of progress in emissions reduction by the companies that are part of its portfolio;
Submit, within 90 days, a “Greenhouse Gas Emissions Reduction Plan” that ensures the alignment of BNDESPAR's activities with Brazil's commitments under the Paris Agreement and the provisions of the PNMC;
Install, within 60 days, a “Climate Situation Room” to evaluate the implementation of the Emissions Reduction Plan in a transparent manner and with the participation of representatives of civil society, indigenous peoples and communities, the Public Prosecutor's Office, the Public Defender's Office, academics and members of the Judiciary.
They argued that the Paris Agreement proposes that countries' treatment of climate problems be conditional, voluntary, and a long-term commitment, and that Brazil already occupies a leading position in the fight against climate change. They pointed out that climate litigation would violate the separation of powers, as it seeks to transform the judiciary into an instrument of climate political governance. Because they are state-owned enterprises, they argued that they lack the autonomy to develop their own environmental policies, but rather must comply with the policies defined by the Federal Union, environmental legislation, and the Federal Constitution.
Conectas Direitos Humanos filed a rebuttal refuting the defense's arguments and emphasizing the importance of the judiciary in climate litigation to protect citizens' rights. It pointed out that the climate measures requested in the lawsuit are distinct from the environmental measures listed by the defendants.
They argued that the deadline for filing claims related to the PNMC had already expired and that the claims in the initial petition did not take into account the potential consequences for the economic activities of the defendants. They maintained that the Paris Agreement proposes that countries' addressing climate issues be conditional, voluntary, and a long-term commitment, and that Brazil already occupies a leading position in the fight against climate change.
They argued that climate litigation would violate the separation of powers, as it seeks to transform the judiciary into an instrument of political climate governance. Because they are state-owned enterprises, they argued that these companies lack the autonomy to develop their own environmental policies and must instead comply with policies defined by the federal government, environmental legislation, and the federal constitution.
Conectas asserts that BNDES and BNDESPAR, despite being public companies intended to foster Brazil's development, are decisively contributing to the worsening of the climate crisis and its effects on human rights because most of their investments are directed toward companies with high greenhouse gas emissions in sectors such as mining and electricity generation. Furthermore, these investments are not subject to climate policies or specific and transparent internal controls. For Conectas, adopting climate criteria to guarantee a healthy environment is not optional because the public administration and state institutions like BNDES and BNDESPAR have an obligation to support Brazil in fulfilling its international commitments, constitutional guarantees, and ordinary laws regarding climate change.
- Connect Human Rights
- BNDES (National Bank for Economic and Social Development)
- BNDESPAR (a subsidiary of BNDES responsible for managing equity participation in several Brazilian companies).
Brazil is the world's fifth-largest emitter of greenhouse gases, accounting for 3.2% of total emissions, and is already drastically suffering the impacts of climate change. Across the country, temperatures, precipitation, and rainfall patterns have been changing. Storms, floods, and landslides—like those recently recorded in Minas Gerais, Bahia, and Rio de Janeiro—have become more frequent in several states.
According to a technical opinion from the Centro Clima da Coppe/UFRJ, at least 65% of BNDESPAR's assets are allocated to companies that are intensive greenhouse gas emitters. This calculation was based on an analysis of reports published by the companies themselves and used a sample representing 85% of the state-owned bank's investment portfolio, which, as of March 2021, was concentrated in ten companies in the oil and natural gas, electricity, meat production, mining, and pulp and paper sectors.
Finally, it is important to highlight that BNDES was created by the Brazilian government in the early 1950s to finance national companies and promote the country's economic and social development in accordance with the policies and priorities of the federal government. The bank operates in two ways: by granting loans and by purchasing shares. This latter form of financial contribution is carried out by BNDESPAR. Currently, these two companies are the main financiers of the Brazilian economy. In practice, this means that they are key players in achieving national emissions reduction targets and in fostering a just transition across diverse market sectors.
- Federal Constitution of Brazil
- National Climate Change Policy (NCCP)
- Brazil Forest Code
- Cancun Agreements (COP16)
- Paris Agreement
- United Nations Framework Convention on Climate Change
- 2030 Agenda for Sustainable Development
- Brazil's Nationally Determined Contribution
- United Nations Guiding Principles on Business and Human Rights