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. BNDES and BNDESPAR presented their answer. They defended that the BNDES system has internal policies, structured procedures and appropriate conduct to address environmental, social and climate issues, including the promotion of the carbon market. They informed that they adopt international and national protocols of best ESG and climate practices, such as the NDC Panel - a platform that shows the performance of the BNDES system in relation to Brazilian climate goals, including monitoring emissions from the projects it supports. They asserted that the system has a pilot methodology for assessing climate risks of supported projects. They highlighted that, in 2022, the measurement of greenhouse gas (GHG) emissions from its administrative activities, calculation of financed GHG emissions and the adoption of divestment processes in carbon-intensive companies and activities were carried out. They defended their passive illegitimacy, since the Federal Supreme Court established, in the judgment of ADPF 708 (Climate Fund), that it is the competence of the Union to execute public policies related to the climate issue. They claimed that the time limit for filing claims related to the PNMC would already be expired and that the claims in the initial petition disregard possible consequences on economic activities carried out by the defendants. They argued that the Paris Agreement proposes that the treatment of climate issues by countries is conditional, voluntary and a long-term commitment and that Brazil already occupies a leading position in the fight against climate change. They pointed out that climate litigation would imply a violation of the separation of Powers, as it seeks to make the Judicial Branch an instance of political climate governance. Because they are state-owned companies, they argued that they do not have the autonomy to develop their own environmental policy, but must comply with the policies defined by the Federal Union, environmental legislation and the Federal Constitution. 

Conectas Direitos Humanos presented a reply, in which it rebutted arguments brought by the defense and emphasized the importance of the Judicial Branch in climate litigation, in order to protect citizens' rights. It pointed out that the climate measures sought by the claim are distinct from the environmental measures listed by the defendants. It clarifies that the core of the debate of the ACP is (i) that the Brazilian legal system implies the necessary collaboration of BNDESPAR to achieve the country's climate goals and (ii) that the entity does not adopt measures in this regard, considering the most advanced technical criteria that exist.

In an interlocutory decision, the court recognized the lack of standing of Conectas Direitos Humanos, noting that the statutory purpose of the plaintiff contains generic wording regarding its institutional activities, with a broad emphasis on "human rights," without specific or direct mention of environmental or climate issues. The decision acknowledged, however, that the subject matter of the action – which discusses the need for climate mitigation measures and their relationship with public policies for state investment – has undeniable legal and social relevance and falls within the scope of the Public Civil Action Law. Therefore, it granted a period for the Federal Public Prosecutor's Office or another legitimate party to join the proceedings, assuming the active role in the lawsuit, under penalty of dismissal without prejudice.

Conectas Direitos Humanos v. BNDES and BNDESPAR

<p>This entry was provided by the Sabin Center for Climate Change Law. Please see the terms of use for citation and licensing of third party data.</p>

Conectas Direitos Humanos v. BNDES and BNDESPAR - press release

Filed

Brazil

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

Dedicated pool of financial resources for climate-related projects.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

Either money or something of monetary value is transferred between two or more organisations, people or countries.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

Terrestrial means "of the earth" and relates to the risks to ecological system that includes all living organisms and their interactions within land-based environments, such as forests, grasslands, and deserts.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Activities of industries that extract natural resources, such as mining, oil, and gas, for commercial use.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

Geohazards are adverse geological phenomenon's that are capable of causing widespread damage or loss to property, life and the environment, such as earthquakes, volcano eruptions and tsunamis. Climate change can increase the frequency and severity of some geohazards, such as landslides, and soil erosion.

Conectas Direitos Humanos v. BNDES and BNDESPAR - press release

Target

Policy instrument

Risk

Impacted group

Just transition

Fossil fuel

Greenhouse gas

Economic sector

Finance