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Brazil

Conectas Direitos Humanos v. BNDES and BNDESPAR

Jurisdiction: 9th Federal Civil Court of the Federal District of Brazil


Principle law(s): Law 12.187/2009, establishing the National Policy on Climate Change (NPCC), regulated by Decree 7.390/2010


Side A: Conectas Direitos Humanos (Ngo)


Side B: BNDES and BNDESPAR (Government)


Core objectives: Whether the Brazilian development bank and it's investment arm should align their investments with the goals of the Paris Agreement.


Summary
On June 21, 2022, Conectas Direitos Humanos filed a claim against BNDES (Brazil's Development Bank) and BNDESPar, the bank's investment arm responsible for managing its shareholdings in various Brazilian companies held by the bank. According to Conectas, this is the world's first civil climate action against a national development bank. Although BNDESPar, which is publicly owned, follows an Environmental and Social Policy for Operating in Capital Markets, which bans support for companies with a track record of environmental crimes and modern-day slavery, this policy does not include climate criteria. The company also does not report the carbon emissions associated with its investment portfolio and still maintains equity positions in sectors that are among the most carbon-intensive in the Brazilian economy. The lack of rules or protocols for assessing the impacts of its investments on the climate crisis are in violation of the Brazil's commitments under the Paris Agreement and the country’s own PNMC (National Policy on Climate Change), among other provisions. 

Based on two technical opinions, Conectas asks the court to require BNDESPar and its controller, BNDES, to be given 90 days to adopt transparency measures and present a plan with rules and mechanisms to commit their investments and divestments to the reduction of greenhouse gas emissions by the companies they finance. In practice, these actions will affect the just transition and guarantee the country's readjustment in the world economy towards sustainable development, which would be the institutional mission of BNDES itself. The plan should align with commitments to reducing GHG emissions by 2030 in the sectors currently financed by the company, in accordance with the international commitments assumed by Brazil. In addition to presenting concrete goals, the plan should be prepared together with civil society, public bodies and academics, and it should provide for environmental and social compensation whenever the targets are not achieved. The case also calls for the creation by BNDESPar of a Climate Situation Room to assess compliance with the targets established in the plan to reduce greenhouse gas emissions, while publishing the progress or setbacks in the sectors that have investments from BNDESPar. One of the requests made in the case is for the Room to be accessed by representatives of civil society, traditional peoples and communities, the Public Prosecutor’s Office, the Public Defender’s Office, academics and members of the Judiciary.

On June 22, 2022, a subpoena was issued to the parties required to manifest on the requested urgency relief.

Case documents

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