In conversation with Ms. Isabela Ribeiro Damaso Maia, Head of Unit, Sustainability and International Portfolio Investors, Banco Central do Brasil

1. When and why did your institution join the NGFS?

Sustainability is not a new topic for Banco Central do Brasil (BCB). Social and environmental responsibility has been embedded in our values for many years — and this trajectory has been marked by significant progress.

In 2008, the first regulatory step was made by restricting rural credit for embargoed areas in the Amazon biome. In 2014, BCB reached an important milestone in this journey, as it required financial institutions to establish and disclose a Social and Environmental Responsibility Policy, and to identify and manage the social and environmental risks. It is important to highlight that both rules were set prior to the Paris Agreement (2015) and the creation of the NGFS itself (2017). Moreover, we adopted from the beginning a broad approach that goes beyond climate aspects, considering environmental and social impacts as well.

Despite all the previous efforts, it was in 2020 that we assumed a leading role in this agenda, both domestically and internationally, as sustainability became a strategic priority for the BCB. This Board decision was translated into a set of concrete actions — both towards the National Financial System and the Bank’s internal management. Since then, the sustainability agenda (BC# Sustainability) has expanded across nearly all units of Banco Central do Brasil and is structured around five main pillars: Regulation, Supervision, Policies, Partnerships, and Internal Management Measures. It was at this point that we decided to join the NGFS.

Importantly, as we look toward the BCB's recently launched strategic agenda for 2026–2029, sustainability remains a central pillar, ensuring that environmental and social risks continue to inform high-level decision-making processes within the BCB's mandate.

Progress on the BCB’s sustainability agenda can be tracked through the Social, Environmental, and Climate Risks and Opportunities Report (RIS). Published annually since 2021, RIS consolidates all the Bank’s initiatives on this topic. It follows the World Economic Forum (WEF)’s recommended structure, covering the entire institution, and aligns with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), now incorporated by the International Sustainability Standards Board (ISSB) for financial disclosures.

2. Can you share with us the key elements of Banco Central do Brasil’s climate strategy and how it fits into the broader national strategy in your jurisdiction?

In a global landscape defined by pressing environmental and social challenges, the BCB views sustainability not merely as a responsibility but as a strategic imperative and a catalyst for innovation.

BCB’s mission is to ensure price stability, safeguard a sound and efficient financial system, and promote the economic well-being of society. Within the mandate, BCB’s actions are guided by principles that seek to balance economic development with environmental preservation. Our organization is committed to integrating sustainable practices into its operations and policies, helping ensure that the decisions we make are grounded in resilience and have a lasting positive impact.

As the regulator of the Brazilian National Financial System, the BCB plays a crucial role in facilitating an orderly transition to a carbon-neutral and resilient economy. To support global decarbonization and adaptation efforts, as well as to build a sustainable financial system, we focus our efforts through four key pillars:

Reducing information asymmetries — Promoting adequate disclosure of social, environmental, and climate risks (ensuring transparency with standardized, consistent and comparable information), which facilitates greater resource allocation to sustainability-focused projects.

• Ensuring financial system resilience — Regulated institutions must identify, measure, assess, monitor, report, control, and mitigate social, environmental, and climate risks in an integrated manner. Moreover, they are required to consider the impacts of their actions on the planet and society’s well-being while developing their Social, Environmental, and Climate Responsibility Policy.  Supporting a coordinated international approach to climate change — The BCB actively participates in several international forums that define best practices and global frameworks.
• Leading by example — Demonstrating best practices through BCB’s own operations.

By acting on these four fronts, BCB aims to support an orderly economy-wide transition to net-zero emissions.

In this context, prudential regulation has focused on raising awareness of social, environmental, and climate risks, increasing transparency, and strengthening financial institutions’ capacity to manage these risks.

Examples of key milestones:

• 2021: Updated the prudential regulatory framework, adopting the term “social, environmental, and climate risks,” requiring standardized information and detailing physical and transition risks. Introduced the mandatory GRSAC report (Social, Environmental, and Climate-related Risks and Opportunities Report) for the general public. This report is based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and focuses on governance, strategy, and risk management.
• 2021: These risks were given the same importance as traditional financial risks (credit, market, etc.) in supervision. Created DRSAC (Social, Environmental and Climate Risk Document) to collect more information and enhance supervisory capacity.
• 2024: Through CMN Resolution 5185, required financial institutions to prepare and disclose sustainability-related financial reports alongside IFRS annual statements, following IFRS S1 and S2 standards starting in 2026 (for listed and S1/S2 conglomerates) and 2028 (for others).
• 2025: Launched public consultation CP 127/25 on a proposed rule for mandatory disclosure of social, environmental, and climate risks, improving the qualitative aspects and introducing standardized quantitative requirements, aligned with international standards (IFRS/ISSB and BCBS).

The BCB has been working closely with several federal government agencies to foster sustainable finance development and support a just climate transition. Recent examples include cooperation on the work agendas of the G20 Finance Track in 2024 and of the BRICS Finance Track in 2025. In 2025, we were also committed to contributing to the success of the 30th United Nations Climate Change Conference (Conference of the Parties) - COP30.

The BCB is aligned with federal government initiatives and actively participates in the development of the Brazilian Sustainable Taxonomy (TSB) and the Eco Invest Brasil Program. These efforts were built under the Ecological Transformation Plan (PTE), launched by the Ministry of Finance in 2023, which links climate emergency and decarbonization to a broader development agenda. Discussions on the Brazilian taxonomy began in 2022 under the Central Bank’s leadership. In 2023, the Ministry of Finance assumed coordination, with the BCB remaining actively involved. The taxonomy strengthens our regulatory and supervisory frameworks by promoting consistency, comparability, and credibility in the sustainability information disclosed.

The BCB manages the Rural Credit National System (SNCR), which provides financing for the production and marketing of agribusiness products. This system encourages investments in rural areas and the industrial processing of agricultural products. In 2021, the BCB established the Rural Credit Bureau, which automatically verifies whether borrowers comply with environmental and social laws through geolocation and integration with government agency databases. This Bureau significantly aids in the fight against deforestation and supports sustainable practices in rural regions. Since its creation, it has prevented over R$6 billion in operations due to noncompliance with social and environmental laws.

3. To what extent did Banco Central do Brasil leverage the work of the NGFS in its own domestic journey? Any concrete examples?

Dialogue and partnership with the NGFS were instrumental to the Central Bank's sustainability efforts even before formally joining the Network. The introduction of sustainability as a strategic value for the BCB in 2020 was partially inspired by the NGFS work program at the time. In fact, our first structured set of actions launched that same year focused on financial and monetary policy, capacity building, and cooperation. This initiative reflected our intention to develop an internal agenda and lead by example.

Since then, despite staffing constraints, the BCB has sought to participate in all NGFS workstreams and task forces, albeit with differing degrees of involvement. We co-led, a few years ago, the initiative that developed the Progress Report on the Guide for Supervisors, actively participated in an initiative on legal aspects, and were part of the NGFS Steering Committee from 2022 to 2025. This participation, especially our time on the Steering Committee, helped ensure that the sustainability agenda strongly permeated the work programs of the G20 in 2024 and the BRICS in 2025, during Brazil’s presidencies of these forums.

The NGFS’s membership — now over 140 — reflects the recognition of the financial system’s role in achieving climate goals. By joining forces, we advance more quickly and effectively toward building a greener financial system.

Capacity building is essential to advancing the climate agenda with central banks, and the knowledge exchange provided by NGFS — through workshops, webinars, reports — has been a key differentiator.

BCB’s involvement with the NGFS was crucial to strengthening supervisory processes and informing the refinement of our regulatory framework. Key NGFS publications—such as the “Guide for Supervisors”, the “Conceptual Framework on Nature-related Financial Risks”, and the “Short-Term Scenarios for Central Banks and Supervisors”—have been particularly valuable in shaping our approach.

While BCB did not directly use NGFS scenario projections in its climate risk analyses due to their limited geographic granularity for a country as large as Brazil, our interaction within the NGFS Scenario Analysis workstream was instrumental in designing our domestic framework. Ideas exchanged in these meetings and references from NGFS scenarios inspired methodologies for assessing the short- and medium-term impacts of extreme weather events, such as droughts and floods, in Brazil. In this sense, NGFS helped shape our climate risk analysis vocabulary and the way we approach related challenges.

Concrete examples also include our contribution to the Collection of Know-How on Greening Central Banks’ Corporate Operations in 2024, where we shared insights from initiatives such as the Life Cycle Assessment of the Brazilian Real. In 2025, we advanced to the Transition Plans agenda, co-leading the development of the Concept Note on Carbon Markets with the Bank of Italy, scheduled for publication in early 2026. Looking ahead, we expect further consolidation of efforts under the Transition Plan and Disclosure subgroups, reinforcing our commitment to global best practices.

NGFS also contributed significantly to COP30. Together, we aimed to connect central banks with COP discussions. Three priority messages were developed for COP30:

1. The high economic costs of climate inaction and the need for mobilization across public and private sectors.
2. The urgent need to scale up global climate finance — especially from private sources — to close the implementation gap.
3. The imperative to strengthen adaptation efforts, as some climate damages are already unavoidable.

To discuss short-term risks of delayed climate action, based on NGFS scenarios, Banco Central do Brasil organized the panel “No Time to Delay: The Economic Imperative for Scaled-Up Climate Finance and Action”, part of the event “Capital for Climate: Harnessing Taxonomies and Interoperability”, hosted by CVM[1] with CNMV[2] and IIMV[3], in São Paulo, on November 7th, during Pre-COP30 week.

The NGFS Declaration on the Economic Cost of Climate Inaction was issued during COP30 at a virtual event. During this occasion, the BCB presented two specific studies. First, the “Impacts of the May Floods on the Economic Activity and Labor Market of Rio Grande do Sul (RS)”. This study provided an overview of the economy of Rio Grande do Sul in 2024, highlighting sectoral differences during the initial contraction and the subsequent recovery throughout the year. Second, the “Floods in Rio Grande do Sul and Prices in the Metropolitan Region of Porto Alegre”. This study analyzed the effects of temporary supply-and-demand imbalances across various segments on prices.

While it is hard to isolate NGFS’s specific contribution amid parallel developments, it has undoubtedly been a strong ally. Our sustainability efforts also include partnerships with the Capacity Building International (CBI), UNEP-FI, and notably GIZ through the FiBraS[4] project, conducted with the Ministry of Finance.

4. One last word?

The climate agenda is not only an environmental issue, but also an economic and financial one with global implications. In 2024, for the first time, the world recorded an average temperature of 1.5 degrees Celsius higher than the level at the end of the 19th century, underscoring the urgency of climate action.

Traditionally, central banks have a core mandate of ensuring price stability and safeguarding the smooth functioning of the financial system. It is undeniable, however, that climate outcomes pose challenges in the pursuit of both objectives. In this context, NGFS’s efforts are more necessary than ever so that this message is not lost amid a challenging geopolitical context.

It is also worth emphasizing the key role of technological innovation in promoting sustainability by turning challenges into opportunities. . Technologies such as artificial intelligence (AI), automation, georeferencing, blockchain, and the Internet of Things (IoT) are instrumental in reducing risks, optimizing processes, increasing productivity, and enhancing transparency. Digital platforms and fintechs also expand financial access in remote or vulnerable regions, fostering inclusion and local development. Additionally, distributed ledger technologies improve supply chain traceability, ensuring adherence to environmental, social, and governance (ESG) standards and ultimately building market credibility..

The BCB recognizes this synergy and is making significant investments through initiatives such as the G20 TechSprint 2024, Lift Learning, Lift Data 2025, and projects under DREX – Phase II. LIFT DATA 2025 was created to foster innovation and promote the intelligent use of data to address BCB’s challenges. . In its inaugural edition, the program was aligned with the discussions and objectives of COP30.