The environmental responsibility of financial institutions and regulation: brief reflections on the Public Consultation 85/2021 of Banco Central do Brasil – BACEN

Abstract

The concern regarding the environment is one of the greatest marks of the 21st century. The Law also follows such trend through the creation of laws which increasingly harden the unbridled exploitation of natural resources and the application of environmental principles to economic activities, in order to guarantee the so-called “sustainable development”. However, when the financed entity generates environmental damage, the question of the environmental liability of the financing entity arises, as well as what precautions such entities should take regarding to the financed enterprises. As specific objectives, this article will study the regulation of the financial sector on the subject (CMN Resolution 4,327 / 2014 and SARB Regulation 14/2014) as well as the proposal for improvement in the socio-environmental regulation applicable to the financial sector, brought about through the Public Consultation 85, opened by the Central Bank of Brazil. As conclusion, it will be seen that the new regulation proposed by BACEN demonstrates an evolutionary leap in the treatment of socio-environmental responsibility by financial institutions, but only time will show the effectiveness of the new mechanisms created, which can be assessed by caselaw and legal opinions from analysis of environmental infractions generated by new enterprises.