World’s first green bonds scheme to finance responsible soy production in Brazil launched


The world’s first financial facility to offer green bonds for sustainable soy production in Brazil was launched.

The Responsible Commodities Facility is expected to provide US$1 billion over the next four years to fund the production of more than 180 million tonnes of responsible soy and corn, worth around US$43 billion over the next decade.

The facility, managed by Sustainable Investment Management (SIM), will be used to provide low-interest credit lines to Brazilian soy and corn farmers that commit to using degraded pasture and avoid clearing forests and native grassland for agriculture.

Over the four year period, the facility ambition to protect or restore 1.5 million hectares of natural habitat in Brazil’s Cerrado, or savanna, leading to an estimated emissions reduction of 250 million tonnes of carbon dioxide.

“Global demand for soy is showing no sign of slowing down, and as a result, is leading to a continuous expansion of the area under cultivation in Brazil,” said Shaun Kingsbury CBE, Chairman, SIM.

He added “By re-directing soy expansion onto degraded cattle pastures, the Responsible Commodities Facility will help reverse the current practice of land clearance, reduce carbon emissions and promote compliance with Brazil’s environmental laws (i.e., Forest Code).”

Making greater use of cleared land would also help bring down emissions linked to deforestation for agriculture, which currently results in estimated emissions of 1.1 billion tonnes of CO2 equivalent per year, or 51 per cent of Brazil’s greenhouse gas emissions.

“In order to address the negative effects of climate change and to stop the dramatic loss of biodiversity that we have witnessed in the last 30 years, we need to urgently and rapidly move to food production and financing models that do not depend on conversion of forests and natural habitat,” said Bruno Pozzi, Director of the Europe Office, United Nations Environment Programme (UNEP).

This initiative will support Brazil’s pledge to reduce emissions by 43 per cent by 2030, with almost 90 per cent of this reduction expected to come from reduced deforestation, yet existing funding mechanisms are unlikely to help meet this target.

“The Responsible Commodities Facility is an opportunity for the market to ensure increased production without contributing to land clearance, which is resulting in the loss of natural habitats, loss of biodiversity and greenhouse gas emissions.” said Pedro Moura Costa, CEO, SIM.

To participate in the facility, producers will be vetted according to eligibility criteria based on commitments to protect Cerrado vegetation and compliance with national legislation. Adherence to these commitments will be independently verified by external companies, and will be overseen by an Environmental Committee of producers, buyers, NGOs and financial organisations.

A Responsible Commodities Registry will keep records of the volumes and source of responsible commodities produced, as well as trace the ownership of these commodities along the supply chain.



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