Riscos climáticos e biodiversidade | Jornada rumo à COP 30

Good morning. Good morning everyone.
I am Luciana Dalan, and on behalf of CNEG,
I welcome the panelists, the
IMA and Febraban team, and also the
audience who are here with
us. This is the second workshop in the
capacity-building track of the Road to
COP 30 journey. And today we're going to talk
about climate risks and
biodiversity. Let me
quickly explain the
format of our meeting today. Well,
the event will be divided into three
different phases. The first is a
presentation of what we call a "
knowledge pill," which will bring
the subject to a more technical level.
Next, we'll have two practical case studies,
and at the end, we're planning a
question and answer session.
Uh, a few announcements. Questions must
be submitted via chat and
will be grouped and answered in the
order they are received. Oh, and we'd
also like to inform everyone
that the workshop is being recorded.
To kick off our workshop,
I'm going to invite Marcelo Billy from
Ambima to give the
institutional opening.
Hello, thank you, Luciana. Good morning. Good morning
everyone. Well, first of all
, I would like to thank
all of our speakers for being
here to talk a
little and present some
concepts and case studies for us,
for this discussion that we hope
will be very productive. Thank you to
everyone for being here, and to all of
you who are watching with
us! Well, we just
released a study on
sustainability in the capital markets.
Yeah, and there are two big ones, right? There's a lot
there, but there are two, two major
conclusions from the research. The thing is, we
have very different levels of maturity
when we're talking about
institutions, right? Asset managers,
investment banks, financial conglomerates,
and even within this segment we
find a great heterogeneity
in terms of how

prepared these institutions are or are not for this new agenda.
So, this is one case. But on the other
hand, we find a very
broad consensus that this agenda needs to
move forward and that associations like
Bima, CENISEG, and
Febraban have an important role to play. I
expect it to automatically migrate my
resume afterwards. Is there anyone here with an
open microphone,
and institutions like ours
have a role to play in this, in various
dimensions, but also in this
capacity building and
qualification so that we can
encompass this agenda, which is quite complex?
So, for us,
events like this are very important, and it's even more important that
we're here together with CISEG and
Febraban, because we don't want to do
rework, we don't want overlap, right?
We need to be very efficient
in these efforts to attract and develop training
for these agendas. So, it's very
gratifying to have this partnership, and also to
be here with supporters like PR,
comofi, GFANS, B3, MEC, and BVC BID.
So we have a lot of people working
together on this effort, and we're
happy to be able to join forces on
an agenda that needs to be
eminently collaborative, right? So,
uh, this is extremely important for us,
given these different levels of
maturity, this effort in recruitment and
training is one of
BBIMA's top priorities, and I hope that,
and we share this with Febra
Ban and CNEG. So, that was pretty much it
. Hey, you can always count on
us, and afterwards send suggestions, and I
hope it's a very
productive morning for all of us. Thank you,
Luciana.
Ville, thank you very much for your speech. I'm
now going to pass the ball to Cíntia Cespedes,
who is representing Febraban, to
talk a little about the role of banks
and the integration of green finance into the
sector's strategy.
Thank you, Luciana. Good morning everyone
. This is just to reinforce
Billy's words, especially
regarding our gratitude to all
our speakers and
supporters. Luckily, Billy already
listed all the acronyms, so I don't
risk forgetting anyone,
but it's very important to have the support of
all these speakers and supporters
because, as Billy mentioned, it's a
collaborative engagement. It's thanks to the
participation of all of you; we would
n't be able to build
such an important and interesting journey without the
growing number of participants at each
workshop. I think this reinforces the importance
of the financial sector's role in
engaging towards COP 30. Here, I think it's
worth highlighting that we're
engaging with all the
other areas of our associates, not
just those working in sustainability,
but also risk management,
legal business areas—a little bit from
everyone—because this is a cross-cutting theme
that needs the support of all areas
for this agenda to actually happen,
so that we can move towards
action and implementation towards COP, and
then we'll have a lot of work to do.
after the COP. Therefore,
training in these areas is important for us to
continue moving forward. I'll return the floor
to you, Luciana. Have a great event
everyone.
Thank you, Cintia. Regarding the issue of
climate risks and biodiversity,
I think it's no longer a choice; it's
an urgent matter for all
markets, right? And for us, including here in
the insurance sector, these risks
aren't just trends, right? These
are realities already visible in our
balance sheets, in the losses we observe on the
rise, and in the increase in areas
and sectors considered high-risk
here in our country. And undoubtedly,
when we encompass these two
spheres of frequency and severity
of these extreme weather events, it's impossible
not to think about the pressure
on traditional
pricing models and how this, in a
very consistent way, threatens the
basic principle of insurance, which is a
mutualization of risk, right? That's why
we chose this topic, which is so
important for us to discuss today. Well,
however, we also see this agenda
as an agenda of opportunity,
right? The insurance sector
then becomes part of the solution, right, to this
problem, to this crisis. Well, the
sector has an
eminent capacity to map risks, guide
behaviors, and finance the transition
to a more resilient and
sustainable economy, right? So, we're not
just talking about compensation for losses, but
we're talking about prevention, we
're talking about protection, and we're
talking about encouraging investment in
low-carbon solutions and
nature-based solutions, right? So, our
commitment is to be at the
forefront of this agenda, helping to reduce
the protection gap and promoting the
sustainable development of our
country. Oh, thank you so much for
everyone's participation here today. Let's
begin, then, here is the first
phase of our workshop, which is the
knowledge pill. We're going to bring you a
statement from Fernando Salazar de Lara. Oh,
Fernando, he's the UNEPFI regional leader
for Latin America and the Caribbean on
climate change issues.
Fernando, the floor is yours.
Can you see my pantaloons?
Absolutely, yes. Okay
. Thanks. Hey, hello everyone. Uh, it's a
pleasure to be here with you all. Well,
I'd like to thank all our partners,
collaborators, and especially our
partners and organizers at Ambima,
CNSG, and Febran, for the space. Hmm, I think so
,
I think someone has an open microphone,
okay? Well, so, uh, I think the fact is that
the entire financial sector is coming together
this year through associations of
banks, insurers, investors, uh,
capital markets, venture capital.
I think it's just a symptom of the
ambition that Brazil has in this very
important year. It is, without a doubt, a
very clear case study that I
take to other countries in the region, showing
how an industry can
organize and orchestrate a training program and
pathway. So, I'm very
grateful for this space, and as
some of you know, Portuguese is not
my native language, so I'll
try to make my Portunhol (a mix of Portuguese and Spanish) as
close to Portuguese as possible.
But today we will address the issue of
environmental risks, and I will try to make it a
practical approach through case
studies of
international and regional financial institutions as part of a
climate journey exercise that
we developed at UNPFI and which inspires
this entire program and capacity-building path
towards COP 30.
In my work on this subject with
different risk teams,
especially when working in
strategic consulting advising
clients, I learned that the best way
to communicate a strategic framework, to
communicate a business plan, to
help break certain myths, to
understand management models, is through
real-world cases applied in
real institutions.
So, I hope this approach can
be useful for you in this
strategic reflection you are undertaking in this very
important year.
When I refer to such an
important year, I'm referring to a year in
which Brazil, through COP30, is leading a
conversation about global climate change,
and not only Brazil, Bos Pojb,
but neighboring countries are also strengthening
their environmental commitments, both in terms of
climate goals and
environmental commitments, right?
Important regulations such as
taxonomies, disclosure standards, and
other areas of oversight are
underway.
Well, but in the same way, the real,
productive, business sector in
Latin America is reinforcing
its commitment to environmental issues,
such as preventing deforestation, which presents a
double challenge, yes, both in terms of
climate change and the degradation of
natural capital. That's why
many institutions
are seeking to develop
comprehensive strategies, complementing,
expanding, and strengthening
climate initiatives to give them a
broader environmental lens. H, some
important initiatives in these areas
BGB, such as the Paris Agreement, the 30
by 30 Agreement, the TCFD, the
nature equivalent, the TNFD, the SBTI, SBTN. These
are some initiatives you can
check out. H, in terms of risks, I always think it
helps to bring numbers. This is
a heat map showing the
percentage values ​​of greenhouse gas emissions
by country and sector in
Latin America and the Caribbean. Well, as you can see
, there's a fairly common pattern, which is the
predominant weight given to agriculture and
land use, which is the most
representative sector both in Brazil and in the
Latin American region.
So, what are the
transmission channels for environmental risk? I think
this slide is very helpful in visualizing how the
risk transmission channels, due
to climate change and loss of
natural capital, behave. H, these
risk factors manifest themselves
physically in terms of transition and
also in terms of physical risk. Well,
regarding impacts at both the
microeconomic and macroeconomic levels.
These economic impacts are
transmitted to the financial sector
through traditional
risk typologies, such as credit risk,
market risk, etc., which you can see on the
right.
Now, to put these
risk typologies into a more practical lens,
you can see that we have gathered a series
of regional examples to support you in
this strategic reflection work,
with real and public case studies
shown by members of our network
in their reports and
public disclosures. These cases will be a
combination of regional cases so that there
may be some progress at the
regional level and European reference cases.
But I don't mean to say that there is no
progress in Brazil. Moreover,
Brazilian entities are leaders
in several of these areas. What
I aim to do is provide a diverse perspective
so that you can learn about cases involving
multinational entities,
Wall Street Banks, European banks,
operating globally, as well as
local institutions and those from
emerging markets in the region.
There I include a brief disclaimer to
reinforce this capacity-building approach, based on what
I tell you about actors who
make their practices public through
disclosures.
The first example is about
credit risk. In this case, a
Chilean institution used a climate scenario
for its loan portfolio to
understand both physical risks and
transition risks of its
portfolio. Well, as you can see,
by region and by sector, a series of
portfolio impacts are applied to
these climate scenarios in
different sectors, as well as
to physical assets that are
threatened by extreme environmental events
.
Ah, with this you can see a
heat map that reflects the different
levels of impact. This exercise can
have diverse applications, not for
example, in the development
of risk measurement models,
probability of default, due
diligence, etc.
Ah, similarly, this
British financial institution conducts
a series of scenarios in its
capital market operations, such as
bond portfolios, trading instruments
, and, as with
this scenario analysis initiative,
they understand the
physical and transition risks in certain
asset classes, with different
time horizons, across a range of
scenarios and shocks
applied to their portfolios. H, again
this exercise can have
diverse applications, for example, they say in
the calculation of the value at risk.
In terms of liquidity risk, we see
yet another case of scenario analysis
applied by a Mexican financial group
. In this case, it's possible to see
how, through an exercise, a
risk analysis, and considering the bank's physical branches and assets
, they conceptualize a bunker
branch, a bunker office, in such a way
that they provide liquidity and
ensure the operational continuity
of their clients affected by
contingencies or disasters in
sensitive areas. They also have vehicles
equipped with banking services to
access these areas after
serious events. And yes, as you can
see, it's a van, a minivan, and I don't
know how the voice says it in Portuguese,
equipped with solar panels. I think they
also have Wi-Fi.
But most importantly, they have
cash and emergency banking services
as a response to reach
places affected by hurricanes, floods,
etc.
In terms of underwriting risk, we
are also seeing some institutions at the
regional level that, in order to protect

client liquidity, the value of collateral, and
the credit quality
of a loan from severe weather events,
are implementing mechanisms such as
parametric insurance. It
is an innovative and
reliable instrument that uses
measurement rates through parameters and
risk manifestation.
Well, in terms of operational risk,
we're seeing that this type of
physical transition risk analysis is also being
carried out on the main
physical assets of the business, and on the operations,
to ensure their continuity. Well,
for this reason,
business continuity plans are developed
for data centers, offices, branches,
headquarters, and other operational centers.
Well, in some cases, such as this
Italian institution, within the
category of non-financial operational risk
, reputational risk
can be included and applied to
activities, projects,
financial products, and services that may be
subject to reputational scrutiny.
And finally, in terms of
strategic risk, we see that some
institutions, like this
British institution that developed
a transition plan,
also seek to understand the challenges and
opportunities of their clients, seeking
a strategic alignment between their
transition plan strategy and
also that of the client, right? In this case,
as you can see, they analyzed
the transition plans and strategies
of their corporate clients,
assessing their exposure to
climate risks, also in order to
understand areas where they may need
support to implement a
transition plan.
With this, the institution seeks to
reinforce both the strategic alignment
of the institution and its clients, as well as
to strengthen
prudential risk management, and to create
engagement with sensitive clients and
clients who may need support during this
transition.
Well, for my part, that would be it in
terms of content.
Here I provide the contact information for my team,
and the names and contact information for the
superstars who accompany me at UnPFI in
Brazil. Yes, please remain attentive to any
questions you may have. We are available should
you wish to connect with us
in more depth.
Well, I'll hand the floor back to the
organizing team. Well, I am immensely grateful for
your support in this space, and I also
continue to try very hard to listen to the
experts from BTG who
are with us today. Okay. Thank you,
Fernando, thank you very much for your
presentation.
Hey, your Portuguese is perfect,
right? I don't need to worry about
that. Wow, those
international examples you brought up are very interesting, are
n't they? I think I understand that this
risk analysis and
presenting it in a
transparent way is very important.
Especially when we're talking about
regulated risks, right? You mentioned here:
market credit risk, liquidity,
underwriting, operational and strategic.
So, the way these risks
have an impact, and the way
industries develop their
action plans, that's really quite
relevant.
Well, this applies not only to
structuring
business continuity plans, but also to the
transition agenda and
risk management in general. So, this is a very
important issue and it's more than
necessary to address it in a very
transparent way, right? So, thank you for
your presentation. We'll start
talking about that in a moment. And to
continue with our workshop, I'm
going to give the
floor to Rafaela Dortas. She is from
ISD and Social at BTG Pactual. She's going to
bring the first case. Rafaela,
thank you very much for your participation. The
decision is yours.
Good morning everyone. It's a pleasure
to be here, Febraban, I'm super happy
because here in the group, we have, you know,
in the BTG group, we end up having an
approach to the topic of SD, to the topic of
environmental, social and climate risks
in a very integrated way with all
business units. So, we look at
insurance, we look at asset management, and
we also look at credit. I am
very happy that CNSG, Ambima and
Febraban have joined together to organize
these events, and it is a pleasure to be here.
I'm going to tell you a little about what
we do in terms of
risk analysis for climate and nature. I will
divide the presentation into three parts. Let's
talk a little bit about why we're
doing these analyses, what
the main motivator is, and discuss the
SD approach at BTG Pactual. And then
I'll present a case study of
how we analyze
climate risks and nature-related risks
here at the bank and the asset
management firm. Is everyone looking at my
screen? Okay. Everything alright?
Yes, everything's fine, Rafaela.
Jewel. So let's go, everyone. So what
's the idea behind the SD area? We
started this area in 2015, largely
motivated by a regulation from the
Central Bank. So, we started out focusing
mainly on our
credit business, but 10 years later the area has changed a
lot. So, today it's an area that
has a team of nine people. We have
people with
traditional backgrounds in the financial market, such as
administrators, lawyers, and economists, as well as
people with
specific expertise today, such as biologists,
people who studied geography,
oil and gas engineering, and anthropology.
So, the idea is that we have a
multidisciplinary team that
focuses on different sectors. We
understand that socio-environmental,
climatic, and natural risks are extremely
complex issues. What we can't
grasp on the surface is that if
we delve deeper
into the subject, we can create
value for our client. So, today
we have an area that has two
very clear objectives. The first step is
to analyze these environmental,
social, and climate risks for all of
BTG Pactual's business units.
When we talk about the BTG Pactual group,
we're talking about an
economic group that has more than
100 to 150 companies, divided
into different activities. So, we
range from traditional
credit operations, investment banking, which
all banks do, as well as
secure operations; we have here
an operation for buying and selling
grains, soybeans, and corn throughout
Brazil. Well, we also have a
significant operation involving investments
in equity stakes in companies in the
real economy. So today the team looks at
all these deals when analyzing all
these deals, and the way we
analyze them is based a lot on
relevance and proportionality. I'll
explain later how we do
this in practice, but the idea is that we'll
analyze the risks and propose
mitigating factors. Often, when we
propose mitigating factors, it's a way for us to
help our clients see things
they hadn't noticed before, or to pay
attention to a topic that's more prominent than
another within the
sustainability agenda. So, we
set as our primary objective for this area to
be recognized by our
clients within the BTG group as
a leading ISD and climate advisor. And the
second objective of the area is, we have
here in the area both the
risk agenda, right, environmental, social and
climate risks, which SUSEP calls
sustainability risks, as well as the
PC sustainability agenda. So, the
report is the bank's annual report, which
will look at the standards of
R, SASB, TCFD, TNFD; it's a report
that falls under the responsibility of this
area. Well, the bank's investors, uh,
AST's investors, ask
us a lot about this agenda. We've been
at IS for 5 years. So, all these
interactions with investors
are also ways for us to understand how
we can change the bank's agenda.
So, one example that we always
like to give is that back in 2021, people asked
us a lot about
financial education, and the bank didn't pay much attention to
that topic.
We started engaging with some
areas here to see what
programs we could offer
to the NGOs we serve, and what
content we could create
for our clients. And two years ago
the Central Bank came and said: "Banks,
now you have to implement a
financial education policy." So, we
understand a lot about this
painstaking work of mapping out the actions that
investors are asking
us about, that the indices are asking
us about, that MSI is asking us about, so we can
integrate them with other areas. It's
also a way for us to have an
internal sustainability strategy. I think the
agenda, the sustainability agendas
in companies, are complex agendas in the
sense that they have many themes and
involve various areas.
So, this second pillar of the SD area
also aims to create this
internal engagement with all areas
of the bank, regarding how we can
improve our agenda, how
we can improve our reporting, how we can
improve our vision
on certain topics, on
certain impacts that we cause,
whether it be the environment or society.
So, just to
finish this slide, I think in
terms of governance, and very much so
, the Central Bank has been asking for this, the
self-regulations, we have today an
ISD committee that is composed of, it is
chaired by the CEO of the BTG group and it is
composed of several members of the board
of directors. So there in the
ISD committee he ends up having two functions, one
function is to educate the bank's senior management
on all these sustainability agenda topics
, which are topics that
are changing every day. And its
second function is to be the final
decision-making body for
any operation within the group. So,
often we discuss an
operation that we understand has a
very high reputational risk, or that
we think is worth taking to the
committee. We are a space where we
discuss the risk, the
return on investment of this operation, and whether
or not it's worth taking that risk.
Generally speaking, when we do the
analysis, we look at
environmental, social, climatic,
and natural factors. The focus today is much more on
climate and nature. But just to let
you know that, like all
banks, we look at issues
on the list of slave labor from the
Ministry of Labor and Employment,
we look at negative media coverage
on socio-environmental issues, we
understand to what extent a project
we are financing has or does not have some
kind of environmental compliance, whether it has done
the appropriate environmental studies, has the
appropriate authorizations, we apply
the UFC performance standards to
operations in our credit portfolio
that are greater than 30 million
dollars. dollars. So this also
causes us to raise the rule a
little more than the
principles of Ecuador. And the idea behind
this whole analysis is for us to understand
the risk here and understand the
mitigating factors. Our main
focus in this area is the result of our
analysis; it can't simply be a matter of whether
this operation is good or bad, or whether this is
good because I think so. What we really want to do is
transform our
socio-environmental climate/
nature risk analysis by relating these
risk analyses to credit risks, to
client credit risks, to operational
risks, and to the
reputational risks that the operation may bring
to the bank. So, if we slightly change
the language of our
analysis and bring it to the real world—the
real world—that's how the business team
understands it. This is a way for us to
add value to
decision-making, because if we only present ourselves
as "this operation is good or bad,
this operation is in accordance with
UN standards," it will be very difficult for the
business world to understand. And if the world,
the business areas, don't understand
why we're here at the bank,
we'll end up being a useless area
in the structure. So this is a very
important mod that we're adding to the
area. There are many patterns. The world is
evolving quite a bit, and we always
try to understand to what extent the analysis
we do will or will not have an impact. The
credit risk of the transaction, right, of the
client or that credit risk of the
guarantee, will affect or not the operational risk of

that project. So, wow, just a
socio-environmental issue can or
cannot paralyze
funding, right? Financing can
paralyze that project being
financed by the bank; to what extent

can our relationship with a particular counterparty affect the
bank's reputational risk? So
we put in place, you know, we make sure that these
risks are integrated into the institution
's risk management system
. And we also have a
very pragmatic approach. So
we bring practical examples of what
happened with other banks,
practical examples of what happened with other
companies. So that's pretty much it,
because we're here and what we're
trying to do in terms of the backbone
of the area. I'm going to tell you a
little bit about what we do regarding
climate risk and
biodiversity risk. For climate risk analysis
, I've divided
my explanation here into two main themes.
So, we have an analysis that
we do operation by operation, and
we have a
portfolio analysis, which is a more
reactive analysis where from time to time we
look at our portfolio and understand
how it's performing. So,
when we're looking at the
operation, as a rule, we're
going to look at three main components.
We're going to understand the company, to what
extent the company is in a
highly carbon-intensive sector, we're going to
do a
theoretical study of how a possible taxation
in the carbon market could affect the
company's revenue or EBITDA.
We're also going to look into whether this
company is the target of
climate litigation cases, okay? The
second analysis we conduct
concerns the allocation of resources.
So, for example, if I'm
funding a project located in
a particular municipality, I'll need to
understand the climate risk associated with that
municipality. If this municipality is
located in a region that will experience many
fires, or some type of
water scarcity. So, if I
identify that risk, we'll
understand if that project has some
kind of insurance to cover that risk.
The third analysis we do is
for assurance. So, when we're dealing with a
bank, traditionally, we end up
accepting various types of collateral. It could
be a guarantee, which is a form of security that essentially
covers the risk for the
individual, or it could be a
real guarantee. So, the bank can decide to
take a
building, a warehouse, or a shopping mall as
collateral. And what we're going to understand is
to what extent this guarantee does or does not have
a relevant climate or physical risk,
and whether this climate risk is being
guaranteed or not, very similar to what
I explained to you about the
allocation of resources. This is for
credit. When we're looking at
the asset management arm of the bank,
it's divided between
liquid investments, which is when the asset manager
is investing in stocks, debt,
bonds, and multi-market funds. And there's
another family of funds
here within the asset manager's bank,
sorry, which are the illiquid funds.
So, today the bank invests in
real estate funds, today the bank invests in
forestry funds, today the bank invests
in funds that buy stakes in
companies. And thinking about the principles of
relevance and proportionality, where do
we believe we can
add the most value for the asset manager, where
can we help in
decision-making, where can we
understand whether
socio-environmental risks make more sense or
not, especially in
illiquid investments? So, today we participate in
the decision-making process.
We participate in the
investment committees, always understanding
what operation we are going to
carry out, what investment, whether we are going to
bring a rural asset, a
real estate asset into the fund, and
what the climatic conditions are for that
rural asset and that real estate asset.
If we're investing in a company,
we also need to understand what
sector the company is in, and whether or not that company

will be affected by a potential
carbon tax. So, for the operation,
we have this way of analyzing.
We use as a framework 20
sectoral policies that are public and
available on our website. So, what
will these 20 sectoral policies
say to 20 different sectors? What
are the environmental, social, and
climate risks, and what are the ways to
mitigate these risks? A second analysis
we do is to look at the portfolio.
So, these are the recurring analyses
that we do every quarter, every
semester, to understand how
our portfolio is doing in terms of
climate risk. So, the first analysis
we do is the climate stress test
, which was a requirement of the
Central Bank. So what do we
intend to do within our
credit portfolio? We have a
very high exposure to all of this
in the bosom.
Does anyone want to say anything? I do
n't think so. From the energy sector. And
within the energy sector, we have
several assets in which we invest.
We partnered with a
consulting firm called PSR, and
PSR estimated for us what would
happen to these assets in 2050, in
2010, in scenarios where everyone would
behave and comply with the Paris Agreement,
and in a scenario where nothing would work out, where
the world would border on chaos. So we
estimated what could happen
to the production of a hydroelectric plant, the
production of
a wind power plant, and how much that
could affect revenue generation.
What did we learn from this
study? Unfortunately or fortunately,
we can only verify the climate impacts
after the
credit operation has ended. Secondly,
the worse the
climate scenario gets, that is, if
countries don't comply with the
Paris Agreement, many other companies will
increase their revenue because there will be more
wind and more water for them to generate
energy. We also extend this
stress test study to the asset
manager, mainly focusing on the
energy assets we have within
the firm and also focusing on
real estate assets. We also
monitor our
loan portfolio to see to what extent
we have more operations related to
renewable energy and fossil fuels. Yeah,
we also understand that
this is a very
relevant topic. We engage
periodically with our
Ascent investments, so we understand whether
or not they have a plan to
reduce their carbon emissions, whether
or not they have a greenhouse gas inventory
, how the issue of
climate change is being addressed
within the company, whether it's a
sustainability area that looks at it,
whether it's risk management that looks at
it, or whether it's another position within
the company. And for real estate assets,
we also have an analysis that's
looking very closely at physical risk
as well. So we have a shopping mall
that's located in the municipality of Uberlândia.
We're going to understand to what extent the
municipality of Uberlândia may or may not have
some type of physical climate risk,
such as flooding or fire, and whether
or not this asset is covered
by insurance. What we've been
trying to improve this year, right? Today,
many of the analyses we do are
analyses that look at a proactive approach
with Zoom in on the city. We want to
improve this so we can view the asset
with zoom from the street. So, the street is Avenida
Brigadeiro Faria Lima, number one. Today
we are improving, we
are seeking sources of information so
that we can understand
these risks and deal with them
appropriately. So this is a
little bit, folks, about what we have for
climate risk, for risk linked to
nature, we at BTG are an
adopter of TNFD.
Well, we understood that it was important for
us to take a stand on this agenda. I think
today we're talking a lot about
risks, but the whole
sustainability agenda also has a
very strong opportunity component, and just
like Brazil, there are other
Latin American countries that can be a benchmark
in this agenda, that can attract a lot of
foreign investment. And so that
foreigners can look at
Latin America, we, as
Latin Americans, have to
position ourselves in some way, whether by
reporting more on issues related to
nature. So, we joined a
series of initiatives,
working groups, to start mapping and
understanding what people around the world
were discussing regarding
nature-related risk analysis, and to try to bring
some framework that we could
apply to both the bank and the asset
manager. We also
hired a biologist two years ago, so
we wanted to have someone with
specific training to understand and learn
about the bank's business and be able to
apply their knowledge to what
we do here at the bank. And
moving a little bit into
risk analysis, right? We appreciate nature today,
don't we? Risks linked to nature, we
end up looking a lot at the sectors
when we're doing the analysis, right?
Considering that all analysis will
focus on the company, the allocation of
resources, and guarantees, we are focusing

much more on the allocation of resources and guarantees, particularly regarding physical risks, especially those
related to deforestation and
conservation units. So, today
when we're
funding a project for a long
time, a large project, we apply
the UFC performance standards, and there's a
performance standard,
performance standard six, which is specific to
biodiversity.
When we know that the allocation of
our resources will be specific
to a particular location,
we also have
tools within the bank to
understand to what extent that location
is close to or far from an area with
deforestation, close to or far from an
area with some type of embargo,
close to or far from an area that has a
conservation unit.
And we apply the same rule to the
warranty. Again, we look at it, we
do this analysis with the goal of
understanding, the guarantee is worth one. Could it be that
due to some environmental liability, it
will cease to be worth one thing and become worth something else?
So that's kind of the motto we
have here in the area. This is the last
slide I had to present to
you. Next up is a little bit with
the names of everyone on the team, our
contact information. I'm available to
answer any questions, and thank you
again for the opportunity, everyone.
Rafaela, thank you for your presentation.

This integration of climate risk
in a cross-cutting way, aligned with the
strategy of all the companies in the group, was fantastic and
very important. Even the
regulators, uh, I'll speak here for
SUSEP, which is the
regulatory supervisor of the
insurance market, uh, it was even foreseen in
SUSEP Circular 666, which is the
regulatory framework on this subject. So, given what
you said, I'd like to add a caveat
, highlighting the importance of
all companies within the
group being aligned in their

climate risk management strategies. So, reinforcing the
importance of this synergy between
banking, investments, and insurance, it's no coincidence that
we're conducting this
training program jointly
with other entities, such as CSEG,
Febraban, and ANBIMA. Well, regarding
multidisciplinary teams, that's super
important. The topic is
multidisciplinary as well, so this different
perspective, this different way of looking
at the same topic, I
think it only enriches the understanding, right? And this
accountability that you
brought up in your speech to investors is also extremely
important, right? Going back to the topic
of transparency, you need to ensure
that your clients,
investors, and suppliers
are all aware of the best
decision-making processes and the
company's willingness to take these types of risks. Well,
you're going to get a question about the
available tools, right, that you
mentioned in your speech, and I'll bring it
to you shortly. Wow, I thought
the case studies you brought up,
those two approaches from BTG, were fantastic. We'll
delve into that in a moment.
I wanted to thank you once again for your speech,
and I'll now give the
floor to Natalia. Natalia
is the executive manager of
sustainability at Zurich. And
thank you very much for your participation,
Natalia. and also Thiago Santana, who
is the superintendent of
risk engineering at ZUR Brasil Seguros. Well,
the decision is yours.
Good morning, Lu. Good morning, everyone. Good
morning, uh, to the folks who are working remotely.
First, thank you very much for the invitation from
Febraban, BBIM, and Senseg. And today
we're going to do a double performance,
right, me and Thiago.
Okay, so, moving on to the first
slide to make
the most of our time, in the next one,
please,
I'd like to show you a
few steps before actually showing
the solution that Thiago will
delve into. But speaking of climate,
especially back in 2019, Zurik, the
Zurik group, along with other
insurers, made a commitment to
achieve Net Zero by 2050. And here
we're talking about insured emissions
and emissions from invested companies. And
last year we launched our
global climate transition plan. It has
four pillars, and today we're going to
delve into the second pillar, which is
precisely about increasing the resilience of
society, not only of our
insured members, but in a much broader way
.
And on the next slide,
given that we're going to delve deeper into
this topic, I wanted to comment that the
climate crisis is already part of our
reality, mainly because we
already perceive it as part of our
daily lives, and this ends up impacting
people, families, communities, and
certainly our sector, our
insurance sector. So, when we talk about
climate risk, what we're going to
discuss here today is how we
also prepare society, our clients, and
our own sector to face
these challenges, which are becoming increasingly
frequent and severe. So,
with that introduction, I'll pass the
baton to Thiago, who will delve
into the climate resilience solution, which
was a
winning solution last year at the
SENSEG innovation award in the
products and services category, showing
that it is indeed an innovative solution
so that
we can demonstrate its
implementation potential, given that COP is the COP of
implementation. So here we
decided to present this specific case
to show how we have been
progressing and how the sector can also
progress in relation to the climate crisis,
thinking about opportunities.
Ti, with you, please.
Okay, guys. First of all, thank you
for the opportunity. I thank CEN,
Ambina, Fai, and FRBAN for this
opportunity to be here, to
share some knowledge with
you about how Zurich and the
insurance market, in general, are providing
practical tools for our clients and
the market
to counteract climate change in
everyday life.
We know this from various sources and also from
practical experience, right? We live here in
Brazil, we've seen the catastrophe in the South, and
climate change is part of our
daily lives. It's no longer just talk, it's
a practical risk that we're
dealing with every day. And given the

general knowledge of insurance companies, Zurik has a long history with
claims, a long history with
climate risk mitigation, and we participate in the
World Common Forum on Risks,
always bringing a lot of
information, but since 2022,
AUR decided not only to bring
information, but also to provide assistance to the
public, assistance to the market
through tools, right? So,
the entire historical claims database,
the entire risk engineering knowledge base,
has been compiled into one tool
to provide users with the current
climate risk for each of their
operations, whether local or global.
In other words, this tool now has a
global reach. And we
went a little further. If we know
the current risk, we know the parameters of
climate change,
according to, for example, the IPCC, right?
We have
globally pre-approved scientific models
for us to simulate and project
climate change in various global locations.
So we use not only
current information from the current risk period
, but we can also
simulate climate change projections
of various natural risks for the
next 10, 15, 50 years into the future, up until
the year we arrive. Then we can
analyze our portfolio in various
scenarios, better, worse, and not
only in the current scenario, but also in
future years.
Adding even more information, the
tool that we're going to exemplify
as a case study provides the information already in a
model, in an international reporting standard
, whether it's the CSRD,
the TSFC,
or the model already practiced globally.
You can extract this information from the
tool and publish it in your
reports in
a standard that the market already accepts. This is
greatly facilitating the
lives of those who will manage
sustainability and
resilience within the company,
bringing information to the market, to
investors, to stakeholders, and to
those who need this
information about how the company is
addressing this both internally and
externally. Well,
that's how we've been doing it
lately, right? We have a
risk specialist area within Zurich.
Each global business unit has a
team of specialists. It is known
as Zurkillan Solution. Here in Brazil,
the field of risk engineering coordinates
these activities,
but it also has a global presence.
These solutions are brought to
market by this area. Currently, this
area has over 75 years of
experience within insurance, and today
we have more than 900 professionals
working solely in
risk engineering. It's not insurance itself, it's
risk analysis for the insurance company. So, there are a lot of
people globally, a large part of this
team are scientists and engineers who
work in the field bringing this
information to the insurance company,
okay? H,
the solution involves bringing data, but
also putting actions into practice. In other words,
we use historical data on claims,
historical data on climate change,
information on how the climate is
changing in that particular region, and we
also visit the locations, understand
what protective measures are in
place there, and how climate change
will impact them, taking into account the
controls available in those locations.
We have a more specific approach
for each type of business, whether it's an
industry, a service, or a
more dispersed and widespread operation;
we can address each of these
operations.
We have specialists from various areas
within the company, right? We have various types
of engineers, including
meteorologists and climate scientists,
who validate this data and
these reports before delivering them to
our clients. And the climate data,
it comes from various sources. Azuri
has her own sources, but
we also collect data from the market, such as
data from NASA, the
Brazilian IMP, or other
public and
global meteorological sources. We compile everything within the
tool and process it to bring
you results, right?
So,
how does this work in practice?
We have the inclusion of information
within the tool, which is nothing more
than a fully digital and
interactive portal. This information is
processed, it shows the
climate risks of each of these locations, and
it undergoes a process of categorization and
criticalization of each climate event
or each natural risk, such as what we
call gales, floods,
hail, extreme drought,
extreme precipitation, and so on. Currently, the tool
includes 12 natural hazards that are already
being processed.
We conduct a
quantification analysis,
that is, which location will receive
priority, what the risk is, what
the estimated loss is for each location, and
also an improvement plan that we
call an adaptive plan. Here is a
sequence of recommendations for each
of the locations that can be implemented
according to the needs or priorities
of each of the companies interested in the
project.
Well, in practice, the tool
can project scenarios up to the year of [year], meaning it
's not just a
long-term analysis, but also considers the
long term. You can design analyses
for the short, medium, long, and very long
term, which would be 2100. In day-to-day work,
clients prefer to do analyses
for the 10, 15, or 20-year future because
we can better see the immediate impacts,
and the medium- and long-term impacts can
be mitigated within that period, right? The
solution and the projection make it more
accurate than trying to predict what will
happen in 2100, but it's
available for those who want to cause trouble with a
very long-term outlook. For example,
we adopt market standards
focused on metrics, mainly
TCFD,
S, and CSRD, which are acronyms for
corporate and financial sustainability markets
. People who work with
resilience and sustainability experience this every
day. Yes, as I said
before, we also have the advantage that the
projections are directly related
to climate change scenarios already
defined by the UN Intergovernmental Panel on
Climate Change, the
IPCC.
And in general, we have a
relative adaptation for each business, that
is, we understand the business, we
know how that business is affected by
each of the risks of nature and
we know which controls are most
appropriate to implement, right?
So, he is monitored throughout the entire process
.
Finally, since we have the database,
the information on how the risk will
change in the future according to
climate risk, global warming, and
climate change, whether in a microclimate
or in a broader risk view,
we can do case-by-
case analysis, understand how each
location will be affected, understand which
risks should be mitigated, and
which processes should be
improved in each location, okay?
Here are two quick case studies before I
show you the tool in practice
. We have two published success stories
, one international and
one local here in Brazil. An
international player. At the beginning of last year,
2024, we had a
very large heat wave in Madrid, during which the
city council contacted Zuric to carry out
some adaptation work.
We had disruptions to several
public services there, especially
education services, right? The
education department contacted us and asked us to
develop a mitigation plan in case
this situation of
extreme heat, extreme heat waves
affecting the city, happens again, right? At the time, schools
closed, and hospitals became unfit
for circulation, both for staff and
patients. We had
widespread chaos in the city, including
deaths from dehydration and excessive
heat.
Zurik worked collaboratively,
developing adaptation plans for the
public education system, and
creating early warning systems for
upcoming heat waves that might
affect the city. And the plans take
into account various needs, such as
adapting the exhaust system, the
air conditioning system of schools and
other public centers, warnings about how the

teaching staff should be divided, and also warnings to students
about how the
frequency of classes should change when this
period of heat intensifies, right? As a result,
an adaptation plan was created and
is currently being implemented by the
Madrid City Council. We have a
second very interesting case here with
VEG. Vegem gets to know us; the company is present
in our daily lives, whether it's in your
refrigerator, your electric car, and so on
.
Well, the company suffered somewhat from the
impacts of the expansion in the south of the
country, and its board of directors and investors
requested an adaptation and
resilience plan. And she sought out Zurich
to understand how this affects not
only the south of the country, but also
the company's operations globally,
looking at the exposures not only
of its operations and locations
here in Brazil, but also of its
suppliers both in Brazil and
globally, right? What is the impact of an
affected supplier, and how does this
impact relate
to VEG's operations? It's a
gigantic portfolio, with over 200 operations
worldwide, and we can incorporate
that vision into our tool and
understand how this interdependence
occurs according to each type of threat
or risk from nature,
whether it's a new alarm, a
likely hailstorm, an
extreme drought, a wildfire affecting a
distribution center, and so on. It is
fine? I'm going to stop talking about theory and
show you a little bit of the practical side
.
The tool is nothing more than an
interactive online dashboard, okay? Where
information is protected.
Zurik has no information on how you
interact with the tool. Many of
our users, many of our
companies that are clients today,
use confidential data to expand
their portfolio, to build new
operations, to launch new stores in the
market. So, we only assist with the
analysis if the client wants to
share this data with us,
okay? I have a case study here that I
put together every time I visit new
clients; I show it to them so they understand
how this tool works. So,
today the client enters their
operating locations, it can be local here in Brazil,
a single city, a single
operating location, or it can be global, okay? This
information is entered into the tool and
processed over several
weeks so that all this
technical information about environmental risk exposures can
be plotted for the client
as well. And here you have several
exposure metrics. You can choose
any of them to work with, such as
insured value, inventory value,
number of employees in each of the
locations, building value,
merchandise value,
company revenue, and other criteria for assessing
your risks and climate exposures.
After this information is entered, the
system processes it and you can track
the global exposures. In my
case here, I only have the Mercul, okay? We have the
pressure from South America here for us to
see. So the darker the color, the greater
the risk. The greater the scope of the
plot example, the greater the
exposure or value at risk. You
can see the locations and the information
it provides, what's
happening in that location. And you
can also get general statistics
about the portfolio you're managing
for your company, or for clients or
third parties. To conduct a

generalized exposure analysis of these climate risks,
okay? H, what's so interesting about the
metrics that we can absorb?
We can see from the portfolio what
the current risk, present risk, or
future risk is for each of the
natural hazards, whether it's tidal
surge, precipitation, storm surge,
gale, tornado, hail, wildfires,
heat waves,
cold waves, rising sea levels, and so on
, okay? There are many other risks that
we can damage that are
important for certain locations.
Others may not be affected, but they
are all available here. And you
can see the current scenario, for
example, it's processed
automatically. Oops, I logged out here.
Let me in again, please.
You can automatically process
this information in real time, and it
will be updated, allowing you to make
changes or selections
to information so that the result
is also available to you in real time. And
you can save these analyses. So,
I'm going to put the real time here, or the
current time. What is the exposure of my
portfolio in relation to the information
I already have in the tool? He's going to say that
in your portfolio you have a low risk of
expansion
in 45% of cases, right? Average
here: 9%, high in 18%, and very, very high
in 27% of all operating locations. And
so you go with precipitation,
with gales, and you can compare on
other screens where these locations are and
compare the current risk in the short,
medium, and long term as well,
so you can see what the difference is
in each of the scenarios over
time and what types of
natural risks you will prioritize and
act upon. So the tool brings all this
analysis ready for you in one
place. Okay? So here we have the
variation between current exposure,
short-term exposure, medium-term exposure, and
long-term exposure. Short term is generally 10
years, medium term 15 years, and long term
20 years, one after the other. So, 2000, in the
current case, 2035, 2050, 2070, right?
Can I change this metric? Yes,
it can be customizable, okay? So it's very
simple to change.
We can see the geodistribution of this
risk, okay? To make comparisons. We can
see it, we can see it by city, by country, by
vulnerability.
What I'd like to show
you here in a quicker way is that I
can also create an overall
risk score between each of
these locations, and it gives me a comparison
of the locations that I
want to visualize, I can compare them.
For example, what is the difference in
risk of flooding
or precipitation between two
specific locations, one in Argentina and one in
Brazil? He gives me the score for each of
them. I know exactly why the
general risk score is
classified as very high (red) or
very low (blue, yellow), right? I can
see it, I can compare it, and I can see the
differences. This applies to both the present and
the future, okay?
Oh, and perhaps most importantly, I have
the insight that for each of the locations
I have all the metrics, and they are
open to you. You know the
indexes, you know the changes, how
it's done, all the material is made
available, all the
indicators are available.
So, you know numerically,
mathematically, how they were managed
and placed in the tool, right?
Finally, by selecting a single location,
if you want to use a single location
as an example and check
its exposure, you can
see all the natural hazards, what
the current situation is in the short, medium, and
long term, and whether it will change,
right? What are the values ​​for
modifying these
natural hazards? For example, it has one
millimeter of rain in
extreme precipitation.
Currently, in a particular location
I'm surveying here in São Paulo, we're getting up
to 188 mm of rain per year. Well, in the short
term, it
could reach 234 and in the very long term,
265, an increase of up to 41%
in the amount of precipitation in that
location, right? I have a tendency for
these risks to increase or decrease over the
long term. And I also have, uh, the
percentage increase for each
of these risks, right? For example,
precipitation, when
comparing the current period with the
very long term, can increase by up to 41% in the amount
of extreme precipitation. Hot days
could increase by up to 9,000%, 9,400%
, by 2070, the number of days with
above-average heat during a year, right?
And so it goes. That's a lot of stuff for
us to possibly damage. This
tool is now available on the
market. Yes, it can be accessed through
the Zurich website. Just get in
touch with us, and we can
provide licenses for anyone who is
interested. Thank you for the
opportunity, and I'll be back here with Luciana.
Thank you,
Thago. Natalia, thank you so much for
your exhibition. This
initiative is fantastic.
Well, we in the insurance industry work
with data, right? So, there's no way you can
create innovation, customized products
that
efficiently and
effectively meet customer needs if you don't understand the risk
you're dealing with, right? So, this
type of initiative really demonstrates
that you are studying in depth, right, what
the exposure of your portfolio is,
the exposure of locations in
our country to these risks, in order to better
structure products that will
effectively and efficiently serve
insurance consumers in our country.
Very interesting.
Well, one of the parts of the tool
you demonstrated also deals with
projecting these risks. We know
how challenging it is to work with this
projection agenda. Well, and another point
I'd like to bring up as extremely
important in your discussion is the
issue of consistent and readily
available databases for better
assessment and management of risks, right?
So, today we see a real
problem in obtaining
information that is truly
reliable for us to work on
this type of agenda in a sectoral way with
insurance companies and society as a whole.
Congratulations! And I'm going to start our

Q&A session right now. Well, we have
a series of questions here, and
we'll do our best to
stay within the workshop's timeframe
so that everyone can share their
perspectives and answers to the questions
that came from the audience.
First, Fernando, I'll pass it on to
you, but first I'll give you a little
overview of the insurance market. Well, the
question is this: we have records of
Brazilian cases from various sectors.
I would really like to get a general overview of
Brazil, as well as some good local examples, would
n't you? So, I'm going to give you an overview
of the insurance sector, and then, Fernando, I'll
pass the ball to you, right? So, there
is still a very
big challenge in the industry today, in this area of
consolidating data related to
climate events. Yes, and CN continues to
observe this opportunity to
build something that will be available to the
insurance sector. She's developing
a climate intelligence hub, okay?
So this platform aims to support
Brazilian insurance companies in underwriting
climate risks, better managing
these risks, and applying
sustainability criteria to their
operations, right? So this hub is one
that will be developed over
the next few years. An
initial delivery is planned for this year,
2025, which is a specific tool
for socio-environmental compliance in
rural insurance, right? So here we
cannot fail to mention the relevance of this
agricultural sector agenda for our country.
And not only that, there is a
regulatory demand that is about to be published
and that came through
SUSEP's public consultation number 01 of 2025. So, it already serves
as a regulatory compliance measure
and truly contributes to
better
risk management. Well, a second tool for
climate risk assessment,
initially focused on flooding,
which is a growing threat to
Brazilian communities, but which is
already projected to
include other risks next year, and
will also be available to
our insurance companies. Well, and in addition, and
I think this answers the
participant's question, it's a report covering
the impacts of extreme weather events
on the Brazilian insurance sector,
right? So here we're going to bring not only
the impact in an aggregated way, but also,
for the sector, mapping the
protection gap and proposing clear recommendations so that
we can work on these gaps and be
increasingly closer to and
developing solutions that will
include the consumer market that is currently
not served by the sector, right? So, the
goal of the hub is to transform the way
insurance companies integrate
climate intelligence into their
business decisions and, obviously, seeking to
reduce this protection gap
that we observe today not only in Brazil,
but throughout the world. So, Fernando,
given that, I'll pass the ball to you
to talk a little bit about the
financial sector.
I have a question, uh, can you
hear me? I'm having some
connection problems.
Yes, I can hear you.
Ah, fantastic. So, regarding the question
about Brazilian case studies,
yes, we have a gallery of
case studies related to this
climate journey, our climate
journey. Hm. These cases reflect the vision of
Brazilian banks and
Brazilian institutions aligned with the PRI, the principles of
responsible investment. We are also
developing some
practical cases for the issue of
investors, institutional investors.
So, we also have a gallery
of practical cases from
microfinance institutions,
development banks, and
other relevant actors,
asset managers, and
resource managers, from Latin America, and some
more local cases from Brazil as well.
So yes, you can contact
our team if you want to learn
more about practical cases, have a
more in-depth conversation,
we are at your
disposal, and it is
possible to have more Brazilian cases.
Thank you, Fernando. Let's move on to the
second question, Rafaela. This is for you.
So, what tool do you use
for physical climate risk analysis? I do
n't know if you can share this
information as well.
It's a tool, thank you for the
question. It's a tool called
Think Hazard, it's from the World Bank, and it's
public. I'll send the link here in the
chat, and it's very interesting. You
enter the municipality
and it can tell you the
climate risks. So, everyone's here.
Wonder. Thanks. Okay,
I'll direct the next question to Fernando,
but Rafaela, you're also
welcome to answer, because he's
specifically talking about a
Febraban regulation, which is SARB 026 of 2023, which, according to the
participant, deals with the
management of the risk of
illegal deforestation in the beef production chain
in the Legal Amazon and Maranhão,
including, among other requirements,
monitoring of
direct and indirect clients and suppliers.
Well, the question would be: What would be the
most suitable tools for
better management in the context of
socio-environmental and climate risk analysis,
SAC risks?
Can you answer this question? Do you
want me to start, Fernando?
Sorry, I had a small
connection problem, so if you could repeat that, I
apologize. And it was for a split second
that my connection dropped.
Let's go. The participant mentions

FEBRAban's SARB 026/2023 regulation, which, according to
him, deals with the management of illegal deforestation risk
in the beef production chain
in the Legal Amazon and Maranhão,
including, among other requirements, the
monitoring of
direct and indirect clients and suppliers. So the question is:
What would be the most
suitable tools for conducting a better
evaluation and management? sectoral in the context
of socio-environmental and climate risk analysis
.
H, I can give a more general answer
about the tools available. At
Unepfy, we have a team that is the
risk center. They
have a global database of
data providers, tool providers, and

various issues related to
sustainability. So you can
see in this, in this, it's a dashboard. Okay,
I'll share the link in the chat so
you can access it. Well, on this
dashboard you can filter
all the tools globally.
Well, if you want to see
deforestation risks, if you want to see
water risks, if you want to see
climate risks, you can find out what
the scope of data is that the
tools have, and you can also see
what the provider is, a
commercial provider, an institutional provider, or
a university. You can have that
level of detail. So, I'm going to
share the link. It's a
general answer. Well, I think for more in-
depth information, you could eventually
contact us and
learn more from our
experts at the
Risk Center, but I think an
initial
search on this dashboard might be
useful for you.
Thank you, Fernando. Rafa, do you want to
add something?
Of course. Well, this regulation from Febraban
basically requires that meat
processing plants have policies to
verify their suppliers and ensure they are
free from deforestation. So,
one source of information is the companies' own
annual sustainability report
. And what
Febraban itself did, along with the
banks that signed this self-regulation,
which was quite rich, this self-regulation
also requires companies to publish
reports to show
compliance with this
SASB standard, right, standard 26. So one
way to look for this is on the
companies' own websites, either through the
sustainability report or some
document that mentions the SASB 26 standard.

Thank you, Rafaela. I'll stay
here with you on the screen because the next one
is for you too. But first, I'm going to
ask, I'm going to give a message here to the
people. Hey, there's a link here in the chat
for a satisfaction survey for this
second workshop. I'm counting on
your attention to complete the evaluation. Come on
, Rafaela. Ah, next
question. In your presentation, you mentioned
20 sectoral policies that
are public. They asked you to
share it here, please. Can you
do that?
Sure, I'll do that too. I'll send
the link to everyone here in the chat.
Wonder.
Opening here.
Thanks. So, the answer is recorded there
. The next question is for
Natalia and Thiago. Well, for the
insurance sector, SUSEP Circular 666 made it
mandatory to integrate
sustainability risks into the analysis of
operational market, credit,
liquidity, and underwriting risks.
How has Zurich been doing this integration?
And there are challenges in adapting the
global strategy to the
Brazilian reality.
Well, I think I can
answer that one.
Well, starting from the end, definitely,
right? So, this global transition plan,
or any global framework from the
Zurich group, it serves, it has to serve,
Brazil, Asia, Europe, and the
United States. And we have
quite difficult, quite different contexts,
right? So, we always
contextualize all these
global guidelines we have to adapt them
to our reality, which is very
different both in relation to the
social context and to environmental and
climate issues. So, we always do
this exercise. Well, and speaking of
Circular 666, we recently
released the
sustainability report, which basically covers the
entire history since 2022, but specifically
regarding liquidity risk and
investment risk, Azuri, which today we already
consider the information from the
emissions of our investee companies
in 100% of our
investment decision-making. We do too,
and we already invest in green bonds. I think if my
memory serves me right,
last year we managed to close with
more than 3% of our portfolio being assets
under management with Green Bonds, speaking
of underwriting. So, the
risk engineering team itself is
part of this analysis, which is much more
contextualized, and we conduct all the necessary
consultations to assess whether that client
has any issues with IBAMA or
any other regulatory bodies. So, we do
this exercise, and for operations as
well. So, when we
register a supplier, when we
register a broker, or
any distribution partner, we
always do these analyses, we
include this sustainability risk analysis
at the time of registration,
right? Because that was also a challenge
we faced throughout this
journey.
Wonder. Thanks. Thank you for your
reply, Natalia. Okay, next
question for Rafaela. Well, it's a
statement that the participant
made. You conduct
climate and nature risk analysis to approve the
operation. This raises the question: do
they also track and monitor the evolution of these
risks throughout the duration of the operation?
How do you do that?
We also do this monitoring.
So, what do we use to
determine whether or not we're going to
monitor an operation? Just to give you
a bit of an idea of ​​the volume, right? Today,
the bank has a loan portfolio of over 200 billion
, so we have
a gigantic portfolio; there are many
operations that the area oversees. Well, so
we decided to use the principles
of proportionality and relevance to our
advantage. So, what do we do?
We'll be monitoring it, but not all
operations, right? We will monitor
certain operations. So, for
example, the final result of our
analysis, which we do for
decision-making, means that I have to
give a score to that operation.
That rating indicates high, medium, or low
socio-environmental and climate risk. If that
operation poses a high socio-environmental
and climate risk, which could be
purely climate-related, plus a risk
linked to nature, we have a
system here that monitors media
related to these companies. So,
every day at 11 AM I receive an
email with negative media coverage of a
list of companies that pose a high
socio-environmental and climate risk to my
credit portfolio and some
investments I have with the asset manager.
Furthermore, if it's an operation that deals
with financing, if I'm financing a
project, we can
hire a third party to conduct
technical visits, periodic visits
to the asset to understand these issues.
So, yes, we monitor the
monitoring, it can be via the
daily media that we have here for
high-risk operations and for other
operations, depending on the type of risk and
the type of operation. This monitoring
can be done directly by the
SD team, by requesting information or visiting the
asset, or indirectly by a
consultancy that visits the asset and requests
information.
Thanks. I don't know if Fernando
would like to add anything
or if we should move on to the next
question. Make yourself at home.
We can continue. So let's go. Well, we
received two questions that
we combined into one, which
basically address the following: Fernando and
Rafaela, how has the financial sector
integrated risk metrics related
to biodiversity loss into its
credit and investment analyses? And then, let's
talk a little about another question
we received, uh, if you could
comment on the management of RSAC and
biodiversity
as an interface to market
and liquidity risks at BTG. One discusses the
credit and investment market in general,
and the other specifically addresses BTG.
Hmm. I can, again, give a
more general answer about some
practices that we're starting to see. Ah,
because finally many
financial institutions are beginning their
climate journey and then complementing,
expanding, and integrating issues of
nature and biodiversity.
I think you could also have a
conversation with our nature team
to learn about more concrete cases in
nature, more cases of the climate-
nature nexus. Some interesting issues
that we are seeing are related
to climate, nature, and
risk management. For example,
some institutions are calculating their
water footprint, right? To meet
some customers who are heavy
water consumers. So, it's also a
way of doing prudential
climate risk management for
drought issues, I don't know how you say it
in Portuguese, and draft. Yes, for
some cases of deforestation for
sensitive clients, they are
also creating a deforestation footprint to
know how many
square kilometers, hectares, and what

resources the clients are using. So, in terms of
concrete measures, we're seeing a lot of
enhanced due diligence, which in
Portuguese is like reinforced due diligence,
to be sensitive to certain clients
, footprints, measurements,
issues related to
other factors like
greenhouse gases, such as the water
footprint, the
deforestation footprint. So, if we have
some practical examples, I'll
share the contact information for our
UNPFI team if you'd like to have a
more detailed conversation, but these are some
emerging practices that we're
starting to see in this climate-nature nexus.
Thank you, Fernando. Rafaela, would you like to
add something?
Of course. I think that when we
talk about risks related to nature,
we're focusing first on how the
issue of deforestation, whether or not a project is occupied
within a conservation unit, or whether a
project is
located within a conservation unit, can
affect the credit risk or the
operational risk of that project,
that guarantee, or that asset.
So, today we, I think the question
was great about pricing the risks
of biodiversity loss. I think that
today we are studying to get to
that point, and when we get to
that point, I will love being able to
answer that question more
adequately.
Thank you, Rafaela. Okay, we're going to the
last question because
we've already reached the time limit. I'm also
going to ask the person who's going to
answer, who's from the Zurich team, to
be brief so we can keep to the
agreed-upon time. Thiago,
the question for you is: Zuri, which has
already worked on catastrophe bonds in
Brazil or in its
international operations? If so, could you


please elaborate on the project's purpose, the region served, risk assessment, and other relevant information
? I know it's difficult to answer
all of this in a more objective way,
but I'm counting on your expertise here,
Thago.
Oh, yes, absolutely. Even here in the
South, Natália had to be here in the
group with us; there was a lot of
practical and extensive activity during those
times. We have specific programs and
processes for
disaster response activities, right? We have an
internal disaster management plan focused on
our clients, and we have a whole
structure for reassessment and evaluation of
climate exposure, depending on the type
of disaster, right? Well, regarding the South,
we had the expansion event.
Well, the critical analysis of the exhibition, it
changes almost immediately, right?
But for insurance, this isn't as
impactful, because insurance analysis is
based on a historical record.
Insurance companies focus heavily on past history,
not on what's happening right now.
So the overall impact on insurance
is very, very small, if there is any at all,
right? But for risk management, it's
enormous. Ah, as part of
risk engineering, where I work and get my
hands dirty every day, we have
a much greater focus on prevention, on
managing these risks, not only
for the insurer's portfolio, but
mainly for our clients.
What can a client do to
protect themselves based on their exposure
in disaster areas, and how
can we help them? Our team here
has a large number of
engineers dedicated to this field of
activity, namely,
risk management consulting. And that's what we're
advocating for right now, when there's a major
catastrophe involving the displacement of people—
management and adaptation to prevent the recurrence
of new catastrophic incidents, okay
? Regardless of the case, whether it's flooding
again or any other type of
natural hazard. I believe that not
only is Zuri doing this, but
other insurance companies in the market also have their
plans in place.
Thank you, Thago, for your reply. Okay,
so let's wrap up the second workshop
in the "Journey Towards
COP 30" training program, a partnership between Ambima,
CNEG, and Febraban.
H, we would like to thank
all the panelists who participated in
this second workshop, and a
special thank you for the
audience interaction, because we received quite a few
questions, which, unfortunately,
we were unable to answer all of them. Hey,
here's an invitation for you
to participate in the third workshop, which
will be held on August 13th
at 10:00 AM. Ah, the next
workshop will cover
portfolio emissions. The idea here is for us to
learn how to measure and report
emissions associated with
financial activities, an essential step in
defining climate commitments and
structuring sustainable products.
So, have a good day everyone, and we'll
see you again in August, folks. A
hug.