Brazil: Reputation fears propel surge of ESG investment in Brazil

When Brazilian president Jair Bolsonaro committed to ending illegal deforestation in the Amazon by 2030, the sceptics had a field day.

Some noted that his pledge, made at a US-sponsored climate summit last month, was an old one: first made by his predecessor Dilma Rousseff in 2015 (and derided even then for its lack of ambition). Others joked that Bolsonaro would achieve the target by completing the destruction of the entire rainforest by 2029. Critics pointed out that, despite promising to double resources for the enforcement of environmental laws, Bolsonaro approved a budget for 2021 which slashed enforcement funding by more than a third.

“We debated internally whether Bolsonaro’s letter to Biden [in which he stated the commitment before the summit announcement] even merited a response since there is such deep scepticism that he intends to do anything differently to achieve the 2030 zero illegal deforestation target,” says one leading institutional investor in Brazil.

This scepticism is understandable: deforestation of the Amazon has surged to its highest level in more than a decade under Bolsonaro; protections for indigenous peoples have been eroded; illegal loggers and ranchers are among the president’s staunchest supporters.

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