Monday, November 14, 2022
On Thursday 10th November the Brazilian Institute of Consumer Protection (Idec), Conectas Human Rights, the Sou da Paz Institute and World Animal Protection launched the 9th edition of the Guide of Responsible Banks (GBR). Based on 18 themes, the study evaluates the sustainability policies of the largest Brazilian banks with regards to companies that they finance or in which they invest. The results indicate that although the eight banks evaluated have made progress in their commitment to social and environmental responsibility policies, there is still a long way to go and much room for improvement.
In the 2020 study, the average bank score, on a scale of 0 to 10, was 3.2. In 2022 the average performance is now 3.8. This means that, on average, these institutions comply with 38% of the policies evaluated, an increase of 6 percentage points compared to the last evaluation This is, however still considered insufficient. The highest score was 5.2, from BNDES, and the lowest, from BTG Pactual bank. "Considering our rating scale, banks are still a long way from being responsible. To be classified as such, they should have at least 8," says lawyer Fábio Machado Pasin, a researcher in Idec's Financial Services program.
The eight largest banks in the country; BNDES, Itaú, Santander, Banco do Brasil, Bradesco, Caixa Econômica, Safra and BTG; were evaluated on the most pressing cross-cutting societal issues (climate change, corruption, gender equality, human rights, labor rights, environment and taxes); sector issues (weapons, food, forests, real estate and housing, mining, oil and gas and power generation); and operational themes: (consumer rights, financial inclusion, remuneration, transparency and accountability).
The new element in this edition of the GBR was the inclusion of the analysis of "Animal Welfare", in which all banks scored a zero as none of them considered it in their socio-environmental policies. The assessment evaluates whether financial institutions have guidelines that take into account the proper treatment of farm animals, according to the International guidelines of the Farms Initiative, and ensure protection for wild animals, given they invest in and finance companies in the livestock, fishing, fur and leather, pharmaceuticals, cosmetics, pet husbandry sectors, among others.
For José Ciocca, Zootechnician and Manager of Sustainable Agriculture in World Animal Protection, the result, although disappointing, was somewhat expected, since this is a new theme within the financial market. "However, as agribusiness is fundamental to GDP [Gross Domestic Product], this first result highlights the importance of working on this topic. Banks need to be aware that the way we produce animals for food affects not only the lives of animals, but our lives and the environment".
Below the leader BNDES, in second place, with 4.1, was Itaú Unibanco, which received the second highest score in "Climate Change" and rose two positions overall compared to the last survey.
In third place was Santander, which on a positive note, now has specific sectoral policies, related to arms, energy and extractive industries.
Banco do Brasil (BB) came in fourth place, with 3.7 points. Although it improved on many topics, it scored 0 in in the “Arms” theme, along with Caixa Econômica Federal and Bradesco; and received the worst score in "Taxes" (0.9), mainly because it does not disclose information related to subsidies received, revenue, profit and payment of taxes in the countries where it operates.
Although it came in second to last place, Safra improved its score from 2020 to 2022, mainly by reviewing its policy on Customer Relationships and its policy for the weapons sector, which began to incorporate several criteria provided by the GBR, such as not engaging with companies that produce nuclear, biological, chemical and cluster munitions weapons.
In final position was BTG Pactual, which although it evolved a lot in relation to the last evaluation – mainly because of improvements in the theme "Forests", received the worst grade in "Financial Inclusion".
The aim of the study is to provide consumers with an overview of what financial institutions do with their money, what kind of companies they finance and to what extent they consider aspects such as deforestation, respect for human rights and labor relations. The report, which is published every two years, was based on data from 2020 and 2021 and follows the methodology of Fair Finance International, applied in 15 countries.
"The GBR's follow-up studies give a complete overview of how financial institutions relate and care about social and environmental sustainability. It is a process that has been strengthened over time and has advances such as the unification of the global methodology, establishing a new level of good practices for financial institutions to improve their sustainability policies based on internationally aligned principles", highlights IDEC Executive Director, Carlota Aquino.
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