BVRio and partners launch online dashboard to engage financial institutions with Forest Code compliance
Last Friday (4 August), a webinar marked the launch of the Forest Code Observatory (OCF) ‘Financial Sector Engagement Panel’, a dashboard revealing crucial data on compliance with the Forest Code contributed to by financial institutions responsible for operating 55% of rural credit contracted in Brazil between 2020 and 2021.
The dashboard is an initiative of the Forest Code Observatory (OCF), developed by BVRio in partnership with Amigos da Terra, Amazônia Brasileira (AdT) and IPAM. It is part of the Forest Code Monitoring Portal, a tool to facilitate transparency on the progress of compliance with the law. The dashboard was developed after interviews with banks between 2019 and 2020 to understand the practices adopted by financial institutions. The initiative had the support of the Brazilian Federation of Banks (Febabran) to expand its scope.
Through the data collected, they identified that 20% of banks are preventing access to credit on embargoed rural properties, and 40% are monitoring the Rural Environmental Registry (CAR) status during the term of contracts with their clients. The objective is to promote transparency on how financial agents obtain and analyse information on their client’s compliance with the Forest Code (Law 12.651/2012), positively influencing sustainable and nature protection practices.
Beto Mesquita, BVRio Director of Forests and Public Policies, presented the Portal and highlighted three benefits generated by the adoption of criteria by the private and financial sector: legal certainty, reduction of reputational and financial risks associated with the activity and environmental compliance, meeting the requirements of markets such as the European Union, which demand the absence of deforestation related to exported agricultural commodities. Beto said, “The importance of this dashboard is to help show the private sector that they are also key players in implementing the Forest Code. This is not just a task for farmers and the government, the various actors must be involved.”
Natália Grossi, agricultural chain analyst at AdT, explained that the primary purpose of the Panel is to provide full transparency on how financial agents charge their clients for the implementation of Forestry Legislation, contributing to decision-making in granting rural credit.
Meetings were held in the year’s first half to improve the dashboard, collect feedback and seek new questionnaire respondents. In addition, environmental legislation was reviewed, such as the National Environmental Policy (Law 6.938/81), the Environmental Crimes Law (Law 9.605/98) and the Native Vegetation Protection Law.
New financial institutions which are interested in contributing to the dashboard are welcome to highlight their continued commitment to transparency and advancing sustainable practices. To learn more about how to participate, interested institutions can contact AdT’s Livestock Technical Coordinator, Cintia Cavalcanti, at firstname.lastname@example.org.