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Social and Environmental Analysis of the Subsidized Projects

The social and environmental aspects of the projects subsidized by BNDES are analyzed as follows:

As for automatic indirect operations carried out through accredited financial institutions, said institutions are responsible for verifying the regularization of the clients’ social and environmental aspects and of the subsidized projects, in addition to compliance with social and environmental rules, in accordance with the Social and Environmental Policy of BNDES.

Operations analyzed by BNDES (nonautomatic direct and indirect operations) follow an approval flow, with assessment of the projects’ social and environmental aspects, as follows:

Classification stage

When BNDES receives a financing request (during the classification stage), it carries out a preliminary assessment of social and environmental aspects of the company and of the project based on information requested from the applicant and on the beneficiary’s registration. This includes verifying issues related to slave labor, environmental crimes and areas embargoed by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA).

At this and the subsequent stage, when the project is scrutinized, BNDES may choose not to accept the operation as a result of possible negative aspects that may damage the Bank’s image or reputation.

Classification of environmental risk

BNDES categorizes the project’s environmental risks (A, B or C) taking into account its industry, type of activity, location, magnitude and environmental impacts.

Portfolio risk profile classified in 2015

Check the classification criteria in the Social and Environmental Policy.

Recommendations to be observed in the next stage of the project analysis may arise from this preliminary assessment. This is the case, for example, of projects posing greater environmental risks, which require an in-depth analysis of impacts and maturity of the company’s social and environmental management and may imply the adoption of mitigation measures.

Analysis stage

At this stage, BNDES verifies the project’s environmental regularization, requesting that the company present environmental licenses issued by the competent authorities. Compliance with social and tax legislation is also verified.

Environmental licenses

The federal, state and municipal bodies of the Environment National System (SISNAMA) are responsible for issuing environmental licenses.

Only projects with appropriate environmental licenses are subsidized by BNDES, and in the case of large projects, licensing usually involves the holding of public hearings by the environmental agencies with the communities potentially affected.

BNDES requires certain sectors and segments that are considered more critical to comply with specific social and environmental criteria. Check the requirements for cattle ranching and sugar and ethanol and read the Social and Environmental Policy for the Mining Sector.

The Banks also analyses whether the company adopts measures aimed at preventing or repairing damage to the environment and occupational safety and health that may be caused by the project. Access the Social and Environmental Policy for more details on the analysis, approval and contracting of operations.

Impact Studies

As for activities posing great environmental impacts, BNDES uses, as an additional source of information during the stage of analysis, the Environmental Impact Studies (EIA/RIMA) conducted by the company to obtain the project licensing with the environmental agencies. The Basic Environmental Plan (PBA) can also be used, if necessary.

EIA/RIMAs are public documents that may be requested by any citizen with the competent environmental agencies.

When the analysis is concluded, BNDES may (i) recommend that the company reformulate the project; (ii) include social or environmental restrictions in the financing contract; and, in some cases, (iii) not grant the financial subsidy due to non-compliance or the identification of social and environmental risks.

Learn more about contracting and the monitoring of social and environmental aspects of operations.

Learn more about specific aspects for the analysis of post-shipment export operations in the Social and Environmental Policy.

Additional credit for social and environmental investment

When identifying the need or opportunity to make social and environmental investments, BNDES may finance them with more attractive conditions and in such a way to complement the project through the Environment Line and the Social Investment Line for Companies (ISE).

The ISE line cannot be used to finance conditions for environmental licensing or legal obligations.

However, as this type of investment is required for compliance with mitigation measures, it may be backed by other BNDES financial products.

Last update: July 29, 2021