By Bunmi Yekini
Brazil will push for a global framework to align national sustainable finance rules when it hosts COP30, as the country unveiled its new system to define green economic activities in a bid to boost investment and curb greenwashing, according to the ministry of finance.
The Brazilian Sustainable Taxonomy, set to be enacted by presidential decree in the coming weeks, will serve as a “dictionary of sustainability” to guide companies, investors and public policy, said Cristina Reis, Undersecretary for Sustainable Finance at the Ministry of Finance.
“It has great transformative potential, guiding the labeling of financial products, the granting of tax and credit benefits, public procurement, and international cooperation,” Reis said. “We hope it will be a beacon to attract investment and encourage companies to adopt more sustainable and inclusive practices.”
The taxonomy will be voluntary and initially focus on climate change mitigation and adaptation, as well as gender and racial equity. More than 5,000 public contributions shaped the framework, developed with input from regulators, civil society and experts.
To comply, firms will need to adopt cleaner technologies and promote equity across their supply chains, she said. “Investment and job opportunities will increasingly concentrate in these areas, creating a virtuous cycle of innovation, development, and social inclusion.”
Reis said over 400 billion reais ($69 billion) in private securities in Brazil currently carry sustainable labels based on differing criteria. The taxonomy will standardize definitions and bring greater transparency. “It is a powerful tool against misleading practices such as greenwashing,” she said.
At COP30, Brazil will propose a global “super-taxonomy” to ensure interoperability among national systems, while respecting national priorities. The idea was first discussed within BRICS in May, she noted.
“The goal is to facilitate comparison between taxonomies, valuing their differences and allowing for more efficient and transparent financing flows between countries,” Reis said. “This clarity fosters an environment of trust that facilitates capital flows and cross-border partnerships.”
The taxonomy underpins other initiatives in Brazil’s Ecological Transformation Plan, including sustainable sovereign bonds and climate finance instruments. It will also support tax and credit incentives, public procurement rules, and alignment with the country’s carbon market.
“More than a technical norm, the taxonomy is a fundamental instrument to steer investment and finance toward sustainable development,” Reis said. “It is a new paradigm for the future of the economy and work.”