Green Business Plan, Itaú – BBA

To meet the requirements of the Paris Agreement and combat climate change, every building must be zero carbon by 2050, and green construction is essential to achieve this. Created in this context, EDGE (Excellence in Design for Greater Efficiencies) is part of a holistic strategy by the IFC (International Finance Corporation), a member of the World Bank, to guide construction towards a low-carbon path in rapidly urbanizing economies. It consists of a green construction platform, which includes a certification program and its own application for evaluating the project and managing the process.

In this context, Itaú – BBA, knowing that the future of business is the integration of sustainability parameters when doing business, developed the Green Business Plan (PEV), with the objective of investing in sectors of the green construction market, with the opportunity to contribute to mitigating the impacts of construction. Aligned with the IFC – International Finance Corporation, it consists of a financing line that provides better financing conditions to customers for EDGE-certified buildings.

To better understand Itaú BBA's Green Business Plan, Mitsidi interviewed Maria Carolina de Almeida Monteiro, from Itaú's real estate products sector. Questions were asked about its process, eligibility, benefits, the Plan's outlook for the coming years for the target audience, the regions served and the expected results. The questions and answers are presented below:

How and when did this financing line emerge? Is it exclusive to EDGE certification?

The financing line emerged at the end of 2019 by an IFC contact to explain about EDGE certification and the idea of the partnership for its promotion, initially without any product or obligation involved, just to expand the market. A little later, Itaú began offering other types of financing with a focus on ESG, so it became possible to establish a more structured partnership with the IFC. The Business Plan already existed and was modified to the Green Business Plan. For now, the Plan only includes EDGE, but it is interested in expanding to other certification systems, with the aim of having buildings certified, regardless of the program itself, as long as it is reliable and accredited.

What are the requirements and eligibility for access to financing? What is the public objective?

The public objective is the same as the Business Plan, financing social and commercial enterprises. The client goes through the screening process to initially contract this financing, then there is a more in-depth socio-environmental analysis, including governance, for the Plan to be approved.

How does the process work? What are the benefits of the financing conditions offered? (Installments, interest, fees, maximum value, etc.)

These issues are defined when the credit is approved. What differs for the Green Business Plan is a financing rate. There is always a tax-related benefit if the enterprise is certified, but the process is not standardized, and there are several criteria and situations that require adaptations, varying greatly from client to client.

What are the results to date? Has there been an increase in financing for EDGE enterprises?

Last year (2021), since the launch of the Green Business Plan in June until the end of the year, there were 4 projects contracted in this modality, representing 310 million reais in financing and 960 million reais in General Sales Value (VGV). This year (2022), so far, 6 operations have been contracted in this modality, representing 290 million reais in financing. Thus, in total, there are 10 operations contracted, with 600 million reais financed, with high growth in this period, also expected for the rest of the year. national.

Where can I find more information about the Plan? And who can I contact?

The main point of contact is Itaú's sustainability department, with demand directed to the real estate service department. If you are already an Itaú customer, contact is made easy and there is already information on all the steps for financing.

What message would you pass on to entrepreneurs seeking financing for green buildings?

Today, there are many more alternatives on the market than there were years ago. Itaú's strategy includes encouraging ESG not only in the real estate market, but in all other areas served by Itaú. Therefore, for the Bank, it is extremely important to encourage this market and bring more players to work on sustainable certifications, by offering a financing line, so that more construction and development companies are involved in this market, aligning with Itaú's objectives.

Mitsidi thanks Itaú BBA for making the interview available. To learn more about the Green Business Plan, contact Maria Carolina Monteiro.

Want to learn more about EDGE and how to apply it to your business? Contact one of our EDGE Specialists: Rosane Fukuoka (also an EDGE Auditor), Luisa Zucchi and Giovana Gonçalves. To request a quote, please email [email protected].