Environmental and social risks in the business lines

Social and environmental impacts of projects financed by the BNDES in the non-automatic direct and indirect modalities are identified and treated throughout the different phases of granting financial support, in accordance with operational policy guidelines, especially from the BNDES Socio-environmental Policy.

While assessing a project presented to the Bank, information on the management of socio-environmental aspects linked to the performance of the interested party’s activities are considered, and its regularity regarding environmental and labor issues is verified. Meeting legal obligations is a non-negotiable requirement in the analysis of support from the BNDES, as are the financial and economic prerequisites for the Bank’s clients.

Impacts resulting from the undertaking to be implemented, such as: generation and maintenance of jobs, the population’s employment and income, as well as the economic and social dynamics in the surrounding areas of projects.

To ensure sustainability is fostered in the supported projects, the BNDES relies on instruments that assist the analysis teams and support decisions regarding socio-environmental issues.

By sending the loan proposals to be analyzed by the BNDES, applicants answer for the environmental issues and social aspects related to the undertaking and the companies’ practices (attached to the Information for Prior Consultation Guidelines). During the initial phase of the request for financial support, eligible projects are classified in relation to their environmental risks with adverse impact, according to the following table.


Classification in relation to environmental risks with adverse impact
Environmental Category Impact Risk
A Activity related to significant environmental impact risks, or those with regional reach. Licensing requires impact studies, preventive measures and mitigating efforts.
B Activity associated to less aggressive or local environmental impacts. Requires specific assessment and measures.
C Activity does not present, in principle, environmental risk.

In accordance with the BNDES Socio-environmental Policy, environmental classification takes into account the sector and type of activity, its location, magnitude and environmental impact attributes inherent to the undertaking. Based on information regarding the impacts from projects, the Credit and Eligibility Committee (CEC) discusses socio-environmental recommendations to be observed during the analysis phase.

In 2011, eligible operations, subject to environmental classification, presented the following profile:


Impact risk profile for the operations involved. Risk C, 38%. Risk A and B, 31%.

Click on image to enlarge it.

The Bank also has a set of sectorial guidelines with specific orientation for the analysis teams regarding socio-environmental issues linked to each sector. There are internal resolutions related to the cattle-raising, sugar and ethanol and thermoelectric power generation to fossil fuel sectors. In 2011, the Socio-environmental Guidelines were approved for the beef cattle-raising, sugar-energy and soybean sectors, which present the fundamental issues and the socio-environmental impacts typical to each sector, besides a summary of Brazilian legislation and the BNDES’ internal norms regarding the matter.

Another instrument that supports the analysis of operations is the Company Evaluation Methodology (MAE), whose objective is to evaluate companies’ intangible assets. Among the intangible assets, the evaluation of the socio-environmental capital helps measure the level of commitment to Social and Environmental Responsibility (RSA) and its associated practices.