CAIXA Econômica Federal Adopts the Equator Principles

Brazil, 18 November 2009

Social Environmental impacts will be taken into account in credit Caixa Econômica Federal has formally adopted the Equator Principles – a set of environmental and social benchmarks for managing environmental and social issues in development project finance globally. The principles were modelled on the environmental standards of the World Bank and the social policies of the International Finance Corporation (IFC).

 

By adopting the EP, CAIXA takes on the commitment to put in place internal policies, procedures and processes to better assess, mitigate, document and monitor the credit risk and reputation risk associated with financing development projects with a threshold of USD 10 million.

CAIXA has also become a member of the Business and Biodiversity Initiative, which aims to more fully engage the private sector in achieving the objectives of the Convention on Biological Diversity. CAIXA is the first financial institution in Latin America to join the Initiative.

“These are good examples of the importance of financial institutions in promoting Sustainable Development, by ensuring that social and environmental variables are taken into account in their investment decisions”, says CAIXA’s vice-president Jorge Hereda.

CAIXA’s OTHER INITIATIVES FOR THE ENVIRONMENT:

New Green Letter of Intent

In August 2008, CAIXA and other Brazilian public Banks signed the Banks Letter of Intent for Social and Environmental Responsibility, which aims at implementing bank policies and practices such as the creation of social and environmental credit lines and the inclusion of social and environmental variables in client and project risk analysis.

Environmental Requirements for Credit

  • Environmental License: financing activities that are potentially or effectively pollutant or use natural resources in their productive process is conditioned to environmental licensing, as prescribed by the law.
  • Amazon Biome: financing cattle breeding companies in the Amazon Biome is conditioned to environmental conformity.
  • Client Social & Environmental Assessment: all large and medium sized companies seeking credit of BRL 10 million or more from CAIXA undergo a social and environmental assessment.
  • Enterprises Social & Environmental Assessment: financing of sanitation and infrastructure enterprises are preceded by an assessment of their social and environmental sustainability in order to assess risks and recommend mitigation and compensation actions.
  • Housing Credit: CAIXA only finances housing construction and real state companies that show proof that the wood used in their undertakings is legal.
  • Land Environmental Assessment: CAIXA housing projects undergo an environmental assessment of potentially contaminated lands, preventing damages to the health of the population as well as financial loss to the actors involved.