BM&FBOVESPA inherited a historic vocation from the founding organizations to carry out a consistent private social investment program, with a relevant impact on the target public. As a natural consequence, the company advanced in this direction and increased its understanding on the contribution to the development of society. In 2009, BM&FBOVESPA formally initiated the inclusion of sustainability approach towards the management of its businesses. The company created, at the end of last year, a board responsible for the integration and management of ongoing socio-environmental investment programs and the definition of the institution’s sustainability policy.
The board was created with the mission to induce, promote and support the adoption of practices that take into account the economic, social and environmental dimensions in the daily activities for BM&FBOVESPA. As such, the company intends to contribute to the perpetuation of the segments in which it operates, while serving as reference to the companies participating in its markets.
In order to align the company with the best practices in environmental management, BM&FBOVESPA will initiate an inventory of carbon emissions, an instrumental step for companies that wish to reduce the environmental footprint of their business and to contribute with the global effort to reduce the effects upon climate changes. The company expects to complete the inventory in the first half of 2010.
Carbon Efficient Index
As a driver of sustainability among the companies that participate in its markets, BM&FBOVESPA will take an important step in 2010 with the negotiation of the Carbon Efficient Index, developed in partnership with BNDES (the Brazilian Development Bank).
The purpose is to induce companies to measure, communicate and manage their emissions, expanding transparency to shareholders and society, and to create opportunity for investments for environmentally sensitive investors.
The portfolio will be comprised of equities from the IBrX-50 portfolio, and weighted by the free float market value of the securities and by the efficiency in terms of emissions of greenhouse gases by the companies.
In order to facilitate authorization of companies for the Index, BM&FBOVESPA will provide support to companies interested in preparing their carbon inventories through specialized consultancies. Negotiations with this Index are expected to begin in November 2010 and to develop an index fund (ETF) associated with the portfolio in 2011.
The Brazilian Carbon Market (MBRE) is a joint initiative between BM&FBOVESPA and the National Ministry of Development, Industry and Foreign Trade (MDIC), which aims at creating the basis of an active carbon credit market in Brazil that will become a reference to participants throughout the world, in addition to offering alternative for Brazilian companies to negotiate the marketing of projects for the reduction of emissions in the country.
The first phase of this work corresponded to the creation of the Exchange’s Carbon Facility, an electronic system developed to register projects validated by certifying companies approved by the UN, based on the principles of Clean Development Mechanisms (MDL).
Concurrently, BM&FBOVESPA developed and implemented an electronic system for carbon credit auctions, which has already carried out two events of certified reduction in emissions of the São Paulo Municipal Government.
In 2010, the first auction for Verified Emission Reduction (Voluntary Carbon Units) will be held.
Social and Environmental Investments - Same vocation
BM&FBOVESPA has a long track record of initiatives geared towards the social and environmental development of the country, and which are in constant evolution. In order to maintain its publicly upheld position in favor of a model to transform society, the company was the first securities exchange in the world to adhere to the Global Pact, a United Nations (UN) initiative that promotes the alignment of corporate practices and policies with basic values and objectives in the areas of human rights, labor rights, environmental protection and fight against corruption.
Additionally, BM&FBOVESPA maintains alliances with civil society and participates in movements and programs such as Long Live Downtown Association; São Paulo Institute against Violence; Our São Paulo Movement; Business Pact For Integrity and Against Corruption; and Companies for the Climate Program, at the Getulio Vargas Foundation (FGV). In many of these programs, the company also participates in the governance of the institution, holding a seat in numerous advisory and executive boards.
In 2009, the company advanced in all its initiatives, strengthening ongoing programs and promoting improvements that reaffirm the commitment to issues that it considers relevant in the socio-environmental area. In all, R$ 9.645 million were invested through different entities that form the company’s social and environmental investment structure.