The sustainability risks consider climate, environmental and social factors and take effect on August 1
The Superintendence of Private Insurance (SUSEP) published Circular 666 on Wednesday, June 28. This is responsible for showing the requirements of sustainability to be observed by insurance companies, open-ended supplementary pension entities, capitalization companies and local reinsurers. The risks of sustainability, according to the Circular, are the set of climate risks (divided into three categories: 1. Physical climate risks; 2. Climate risks of transition; 3. Climate risks of litigation), environmental (those that cause losses due to the degradation of the environment and the excessive use of natural resources) and social (generating losses due to the infringement of fundamental rights and guarantees or acts that are harmful to the common interest).
“The inclusion of climate risks of litigation is an interesting innovation by SUSEP and very welcome. It demonstrates that the regulator is attentive to the movement in the market and the filing of legal actions related to climate change, which is something that is happening all over the planet. Climate litigation has become one of the most important instruments to guarantee the integrity of the Paris Agreement and provides materiality to climate risks, enabling the actors from the financial market to recognize and value the potential financial impacts,” explains Gustavo Pinheiro, the coordinator of the Low Carbon Economy portfolio of iCS.
The circular introduces another important aspect: the obligation to assess and classify risks of sustainability by levels of materiality. These studies, incidentally, must take into consideration characteristics such as activities, operations, products, service providers, suppliers and clients, in addition to a minimum reassessment at least every 3 years.
Luciane Moessa, the founder and executive director of SIS (Sustainable Inclusive Solutions), which is an iCS grantee, worked directly in the preparation of the final document by suggesting improvements in what, according to her, was already something very positive. “The contribution that I consider the most important concerns the fact that, in the risk management system, they did not mention the need to classify the risks, which is fundamental when thinking about this management at the portfolio level. The insurers and pensions are significant investors. We were able to introduce the term “classify” into the final wording,” she says.
Another recommendation by the SIS that was accepted was the inclusion of the word restoration in the section that deals with positive environmental impacts. Beforehand, the text only mentioned preservation and repair, which should only take place when restoration is not possible.
The companies from the sector must implement criteria for the pricing and underwriting of risks that observe, for example, the history and commitment of the client in mitigating the associated risks of sustainability, apart from any other possible applicable restrictions or limits.
Strengthen the watchdog capacity of civil society in relation to the commitments made at the national and subnational level and by the private sector that contribute to achieving the goals of the Paris Agreement.
Strengthen the climate policy of Brazil, especially by updating and strengthening the PNMC and revisiting its governance in the light of the Paris Agreement, ensuring the participation of the different actors and that the concepts of social justice, equity and climate racism are taken into consideration.
Ensure the incorporation of the full extent of the climate risks and impacts in the credit pricing, investment decisions and insurance coverage, through the use of regulatory and financial instruments and the incorporation of the climate agenda in the concept of fiduciary duty of the economic agents.
Stimulate the direction of public and private investments towards an infrastructure that is aligned with the transition to a low carbon economy through the advance of regulations and the promotion of access to “green” lines of credit.
Area 3 – Agents of change for climate action
Agents of change who must play a leading role in the just transition to a low carbon economy.
Strengthen the mobilization and the civic engagement in relation to climate change in the electoral processes, by raising the awareness of the electorate and the promotion of the communication capacity of the Amazonian organizations.
Engage the urban population of the Amazon in the defense of the social and environmental integrity in the cities of the Amazon and contribute to the advancement of the climate agenda, with the strengthened local civil society to play a leading role in the changes.
Promote the leadership of the Afro-descendant population in the climate debate and their fair participation in the decision-making processes, allowing them to promote solutions that are compatible with their security and rights and appropriate intersectoral climate actions and policies.
Strengthen the competitiveness of the renewable sources through the reform of the electric sector and promote the preparation of the regional development plans in the Northeast, guaranteeing the universal access to safe and accessible energy to everybody.
Promote the transition of the strategic industrial sectors to comply with a low carbon economic structure, considering the opportunities offered by energy efficiency, electrification, low carbon fuels such as biomethane and green hydrogen, as well as possible disruptive technologies.
Strengthen the implementation of the Forest Code by the strengthening of the command and control mechanisms, the consolidation and improvement of regulations, the support/promotion of technical assistance and economic incentives.
Strengthen the bioeconomy as a promoter of local and regional development, preserving the environmental integrity, increasing the leading role of the traditional populations and promoting their greater insertion in the national GDP and in our R&D&I policy.
Este site utiliza cookies funcionais e scripts externos para melhorar a sua experiência. Que cookies e scripts são utilizados e como têm impacto na sua visita é especificado à esquerda. Você pode alterar as suas definições a qualquer momento. As suas escolhas não terão qualquer impacto sobre a sua visita. NOTA: Estas definições só se aplicarão ao navegador e dispositivo que está a utilizar atualmente.