Glossary

INTRODUCTION

CBC has produced in partnership with the New Economic Debate Monitor (NDEM) the Climate Glossary. The compilation, prepared in 2021, will be updated annually.

Last update: December 2021

FULL

Paris Agreement

Signed in 2015 during the COP XXI in Paris, the Accord falls under the UNFCCC and aims to update and increase the ambition of the parties’ commitments to reduce greenhouse gas emissions. The Agreement foresees, among other things, keeping the global average temperature increase to less than 2°C above pre-industrial levels, besides establishing individual reduction targets for each country and instituting mechanisms for commercializing carbon credits. After the emptying of the Kyoto Protocol, based on the criticism about the differentiations between Annex I countries and the others, the Paris Agreement established individual reduction targets for each party (the so-called Nationally Determined Contributions, NDCs) and instituted mechanisms for the establishment of carbon credit mechanisms, through article 6 of the document.

See also: UNFCCC; COP; Kyoto Protocol; Article 6.

Adaptation

Adaptation refers to adjustments in natural or human systems in the face of current or expected climatic stimuli and their effects. In Brazil, the National Policy on Climate Change defines adaptation as “initiatives and measures to reduce the vulnerability of natural and human systems to the current and expected effects of climate change. It can occur through change in different systems/areas and some examples of adaptation measures are: preparation of risk assessments, improvement in farming practices in regions of higher drought incidence, construction of barriers to protect against sea level rise, development of early warning systems, improvement in insurance coverage or development of social safety nets.
Adaptation seeks to reduce the effects of climate change and exploit possible opportunities, and is necessary regardless of how much we can reduce GHG emissions, because historical emissions have already altered the climate in such a way that the Earth’s average global temperature is breaking records every year.

See also: Mitigation. | References: Adapta Clima; National Policy on Climate Change (2009); National Plan for Adaptation to Climate Change (2016).

Agenda 2030

The 2030 Agenda is an action plan to guide countries, institutions, companies, universities, and individuals toward the promotion of sustainable development and the eradication of poverty. It consists of a Declaration, an outcome framework – the 17 SDGs and their 169 targets, the core of the 2030 Agenda – a section on means of implementation and global partnerships, and a roadmap for follow-up and review. It was adopted in 2015 through the launch of the document “Transforming Our World: The 2030 Agenda for Sustainable Development” during the United Nations General Assembly in September of that year. Because its implementation horizon is the year 2030, the document is called Agenda 2030.

See also: Sustainable Development Goals; SDGs | Reference: Agenda 2030 Platform.

Global Warming

According to the Intergovernmental Panel on Climate Change, global warming refers to the observed or projected gradual increase in global surface temperature as a consequence of the accumulation of greenhouse gases in the atmosphere from human activities. Industrial and agricultural activities, the burning of fossil fuels, deforestation, and fires are some of the sources of anthropogenic emissions of these gases, which intensify the greenhouse effect. The consequences of global warming can affect society in many ways, impacting the social, cultural, and environmental areas. Human health, community infrastructure, transportation systems, water supplies, and food are examples of segments that can be harmed by this phenomenon. Some of these consequences are: an increase in the repetition and intensity of extreme weather events, such as floods, storms, hurricanes, and droughts; melting glaciers; intense heat waves; rising sea levels; desertification; changes in rainfall patterns; changes in ecosystems with a decrease in biodiversity and extinction of species; advancement in tropical disease vectors due to higher temperatures; damage to agriculture, putting food security at risk.

See also: Greenhouse Effect; Greenhouse Gases; Climate Change; IPCC.

Article 6 (of the Paris Agreement)

Article 6 of the Paris Agreement provides for the creation of market-based instruments to encourage and stimulate cooperation towards the targets and increased ambition of the NDCs. The instruments aim at trading internationally transferred mitigation outcomes (ITMOs) and a decentralized mechanism for carbon credit transactions between public and private entities. In practice, it allows countries to trade greenhouse gas emission reductions.

See also: Paris Agreement, NDC, Carbon Credit | References: Climate and Society Institute (2021): Brazil’s competitive advantages in the market instruments of the Paris Agreement. Rio de Janeiro/RJ – Brazil.

Corresponding Adjustment

National Communication

These are documents that must be submitted periodically by all Parties to the UNFCCC, containing information on the actions taken by countries under the Convention. The main elements of the National Communications include a general description of each country’s context and institutional arrangements; the national inventory of GHG emissions and removals; actions implemented or planned to address climate change; and other information relevant to achieving the UNFCCC targets. Parties must submit their National Communications to the Conference of the Parties (COP), with different submission deadlines for Annex 1 and non-Annex 1 Parties.

See also: UNFCCC; COP, GEE.

CONAMA

The acronym CONAMA stands for Conselho Nacional de Meio Ambiente (National Environmental Council), created in 1981 by Federal Law 6938/81, which established the National Environmental Policy (PNMA). CONAMA is the deliberative and consulting collegiate body of the National Environmental System (Sisnama). Its purpose is to advise, study, and propose to the Government Council and other environmental agencies governmental guidelines and policies for the environment, and to deliberate, within the scope of its competencies, on norms and standards for the environment. The Council is chaired by the Minister of Environment, and its Executive Secretary is the Executive Secretary of the Ministry of Environment (MMA). The collegiate is composed of 108 councilors, representing five sectors: federal government, state governments, municipal governments, business entities, and entities of workers and civil society.

See also: CONAMA; SISNAMA; IBAMA; ICMBio.

Conference of the Parties (COP) of the UNFCCC

The organ that brings together the parties to the United Nations Framework Convention on Climate Change (UNFCCC), signed during Rio 92. At the COPs, representatives of the signatories to the convention meet in a decision-making capacity, as well as observers from non-party states, civil society, academia, the private sector, the press, etc. At COPs, working sessions are held and our commitments that update or deepen the UNFCCC framework are approved. As an example, during COP3 in 1997, the Kyoto Protocol was approved, and during COP21 in 2015, the Paris Agreement was approved. The COP26, to be held in November 2021, will be hosted in Glasgow, UK.

See also: UNFCCC.

United Nations Framework Convention on Climate Change (UNFCCC)

The United Nations Framework Convention on Climate Change, known by its English acronym UNFCCC, is one of the agreements signed during the United Nations Conference on Environment and Development (Rio92). The agreement’s central objective is to establish commitments and obligations for the parties, in order to stabilize greenhouse gas concentrations in the atmosphere and prevent anthropic action – that is, action caused by humans – from interfering with the planet’s regeneration capacity. The UNFCCC is based on the principle of common but differentiated responsibilities, whereby the commitments made take into account the capabilities and different levels of development among the parties. Among the commitments made by the signatories are to draw up national inventories of greenhouse gas emissions, implement national and regional mitigation and adaptation programs, and, in the case of developed countries, transfer technological and financial resources to developing countries. The UNFCCC currently has 198 signatories, known as “parties”.

See also: Conference of the Parties (COP).

COP

See also: Conference of the Parties (COP).

Carbon Credit

Carbon credit is a generic term for any tradable certificate or permit that represents the right to emit one ton of carbon dioxide or the equivalent amount of a different greenhouse gas (tCO2e). Carbon credits and carbon markets are one component of national and international attempts to mitigate the growth in greenhouse gas (GHG) concentrations. One carbon credit is equal to one ton of carbon dioxide or, in some markets, carbon dioxide equivalent gases. The goal is to allow market mechanisms to drive industrial and commercial processes in the direction of low emissions, or less carbon-intensive approaches than those used when there is no cost for emitting carbon dioxide and other GHGs into the atmosphere. Since GHG mitigation projects generate credits, this approach can be used to finance carbon reduction schemes among trading partners and around the world.

See also: Article 6 (of the Paris Agreement) | References: Carbon Credit – Definition, Types and Trading of Carbon Credits”. Corporate Finance Institute. Retrieved 2021-05-08.

Sustainable Development

The term began to be used in a systematic way after the publication of the Our Common Future Report, in 1987, also known as the Bruntland Report. Based on the concept of ecodevelopment, sustainable development is founded on the connection between the pillars of the economy and the environment. The concept reinforces the idea that, while development is a right to be pursued by countries, it is necessary that such a strategy be adopted without compromising the availability of resources for future generations. Progressively, the agenda has broadened to include social issues, such as the need to promote sustainable development that includes issues like poverty reduction and gender equality, as expressed in the Sustainable Development Goals of the 2030 Agenda.

See also: Sustainable Development Goals; SDGs.

Deforestation

Deforestation means the suppression of forest areas, i.e. the reduction of forest cover. In general, deforestation occurs to allow the use of that area for other purposes, such as agriculture. However, other interests can lead to the cutting down of forest areas, such as deforestation for speculative purposes. In Brazil, the Forestry Code establishes that rural properties must maintain a portion of native forest cover, which constitutes the Legal Reserve. In the Amazon, it must be 80% of the area of the property, in the Cerrado it must be 35%, while in the other biomes it is 20%. Besides the Legal Reserve, some specific areas must be preserved due to their environmental importance, constituting the Permanent Preservation Areas (APP). Therefore, some areas can be deforested legally, but the problem currently lies in the high rates of illegal deforestation that occur in Brazil. The National Institute for Space Research (INPE) monitors forest cover in Brazil by satellite, and has been fundamental to the formulation of public policies and to the fight against illegal deforestation. Forest ecosystems are responsible for several environmental services, so deforestation affects these benefits that forests provide. Some ecosystem services are climate regulation, recreational services, and water regulation.

See also: Environmental Services.

Carbon dioxide (CO2)

Carbon dioxide, or carbon dioxide, as it is popularly known, is the chemical compound consisting of two oxygen atoms and one carbon atom. It is generated, among some chemical processes, by burning coal and hydrocarbons, including fossil fuels (oil and natural gas). Carbon dioxide is one of the main greenhouse gases. It accounts for 78% of emissions from human activity and is closely linked with climate change.

See also: Climate change; Greenhouse effect; Global warming.

Carbon Neutral Economy

See also: Climate Neutrality.

Low Carbon Economy

The low carbon economy is based on the reduction of the impacts of economic activities on the environment, mainly through the reduction of greenhouse gas emissions, generating employment and development. Among the measures for a low carbon economy are the expansion of the production and consumption of clean energy, the search for energy and production efficiency gains, and the attribution of costs to the impacts generated by the emission of pollutant gases. In parallel, the low carbon economy promotes the rational use of natural resources, the renewal of the energy matrix, and the circularity of production.

See also: Climate Neutrality; Sustainable Development.

Greenhouse Effect

The greenhouse effect is a natural phenomenon that ensures the proper temperature for life on Earth. It is caused by the concentration of gases in the atmosphere, which form a layer that allows the sun’s rays to pass through and absorb heat. The increased concentration of these gases in the atmosphere, resulting from human activities, has made the gas layer thicker, hindering the dispersion of solar radiation and causing greater heat retention. It is precisely this heat retention that has caused the increase in temperature on Earth, the so-called global warming. In short, the greenhouse effect is a natural process that is intensified by human action and causes global warming.

See also: Global warming; GHGs.

ESG

Acronym for Environmental, social and governance. These are the best environmental, social and governance practices, which make the solidity, high performance and better resilience of the companies and the businesses more tangible in relation to climate and sustainability. It has gained prominence in the last few years, mainly due to the inclusion of topics such as sustainability and compliance in risk analysis and rating of companies.

Reference: Cebds.

Greenhouse Gases

Greenhouse gases (GHG) are gases naturally present in the atmosphere that absorb part of the infrared radiation emitted by the Sun and reflected by the Earth’s surface, making it difficult for this radiation (heat) to escape into space and warming the planet in a phenomenon called the greenhouse effect.
The Kyoto Protocol regulates six of the main greenhouse gases that are monitored by GHG Inventories: CO2 (Carbon Dioxide), CH4 (Methane), N2O (Nitrous Oxide), SF6 (Sulfur Hexafluoride), HFC (Hydrofluorocarbons), and PFC (Perfluorocarbons).

See also: Greenhouse Effect; CO2; Kyoto Protocol; GHG Emissions Inventory.

IBAMA

The Brazilian Institute for the Environment and Renewable Natural Resources (Ibama), created in 1989, is a federal autarchy, with administrative and financial autonomy, linked to the Ministry of Environment (MMA). The agency acts in the execution of national environmental policy actions. Its federal attributions involve: activities related to environmental licensing, control of environmental quality, authorization for the use of natural resources, inspection and monitoring, and enforcement of the National Environmental Policy (PNMA). Ibama can present environmental police power, applying fines in situations in which non-compliance with environmental legislation is proven.

See also: ICMBio; CONAMA; SISNAMA. | References: Federal Law No. 7.735, of February 22, 1989, IBAMA.

ICMBio

Autarchy of the federal government linked to the Ministry of Environment (MMA), created in 2007. It is up to the Institute to carry out actions related to the proposal, implementation, management, protection, sustainable use of renewable natural resources, inspection and monitoring of the Conservation Units instituted by the Union, as well as to promote and carry out research, protection, preservation and biodiversity conservation and environmental education programs. Its activities also have the purpose of promoting and executing recreational, public use, and ecotourism programs in Conservation Units where such activities are allowed.

See also: IBAMA; CONAMA; SISNAMA. | Reference: Federal Law Nº 11.516, of August 28, 2007.

Emissions Inventory

The GHG inventory is the description of the profile of the sources of gas emissions, which allows the mapping of the sources of GHG emissions of an activity, process, organization, economic sector, city, state, or even a country, followed by the quantification, monitoring, and recording of these emissions, and makes it possible to evaluate the impact of emission mitigation efforts that are being conducted. With this, it becomes possible to establish more assertive and targeted reduction and/or compensation strategies and goals. According to the IPCC Guidelines (2006), “national inventories include GHG emissions and removals that occur within a national territory and offshore in areas where the country has jurisdiction.” The sectors that are the object of national inventories, according to the IPCC-2006 Guidebook, and that are used in the structuring of municipal and state inventories as well are: Energy; Industrial Processes and Product Use (IPPU); Agriculture, Forestry and Other Land Use (AFOLU); and Waste. To prepare a GHG inventory it is necessary to follow available protocols and standards for its compilation. Currently, the most widely used standard is the Greenhouse Gas Protocol (GHG Protocol), which is ISO 14,064 compliant. The GHG Protocol was adapted to the Brazilian national context, through the Brazilian GHG Protocol Program. For the purposes of quantification methods, the most important reference is the IPCC Guidelines for National Greenhouse Gas Inventories.

See also: GHG; Carbon Sequestration; Low Carbon Economy; Mitigation; IPCC | References: Inventory and Scenario of Greenhouse Gas Emissions of the City of Rio de Janeiro, IPCC,2006, WayCarbon.

IPCC

The Intergovernmental Panel on Climate Change, created in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Program (UNEP), is composed of experts from various fields of knowledge, and aims to evaluate, interpret, and gather relevant information, providing governments with scientific information that can inform climate policies. It is currently the world’s leading authority on climate change, and is organized into three working groups, which focus on the following specialties: climate science (group I), impacts, vulnerabilities and socioeconomic and natural effects as a result of climate change and possible adaptations (group II) and climate change mitigation, evaluation of methods to reduce and remove greenhouse gases from the atmosphere (group III).

See also: www.ipcc.ch/reports/ | Reference: IPCC.

Climate Justice

Climate justice is a concept closely linked with human rights and climate change issues, from a perspective in which countries that contribute the least to climate change are the ones that suffer the most from its impacts. Some theories claim that climate justice and the movement for racial justice are inextricably linked. According to the Mary Robinson Foundation, climate justice needs to incorporate discussions capable of generating perspectives about the future, with the mandatory participation of peripheral, black men and women, indigenous, quilombola, traditional communities, and other marginalized, admittedly vulnerable groups. Thus, climate change mitigation and adaptation cannot reinforce climate racism, and effective measures need to be proposed that incorporate marginalized groups into climate and sustainability decision making.

See also: The Mary Robinson Foundation – Climate Justice. | References: MILANEZ, Bruno; FONSECA, Igor Ferraz da. Climate Justice and Extreme Weather Events: the case of floods in Brazil. Ipea, Regional, Urban and Environmental Bulletin, July 04, 2010. Available at:<http://repositorio.ipea.gov.br/bitstream/11058/5554/1/BRU_n4_justica.pdf>.

CDM

The Clean Development Mechanism (CDM) is a carbon offset scheme administered by the United Nations (UN) that allows countries to finance greenhouse gas emission reduction projects in other countries and claim the emissions saved as part of their own efforts to meet international emissions targets. The CDM, defined in Article 12 of the Kyoto Protocol, was intended to fulfill two objectives: (1) to help non-Annex I countries (predominantly developing nations) achieve sustainable development and reduce their carbon footprints; and (2) to help Annex I countries (predominantly industrialized nations) meet their emission reduction commitments (greenhouse gas emission limits). Both projects and the issuance of CER units are subject to approval to ensure that these emissions reductions are real and “additional”. Certified emission reduction units are issued for successful projects, which can be traded in emissions trading. Because several high-emitting countries, including the United States and China, were either not signatories to the Kyoto Protocol or were not required by it to reduce their emissions, most of the CDM market came from European countries. This, together with the recessions caused by the global financial crisis and the European debt crisis, has resulted in very low demand for carbon offsets, causing the value of the certificates to plummet.

See also: Carbon Credit. | Reference: Carbon Trust (March 2009). “Global Carbon Mechanisms: Emerging lessons and implications (CTC748).” Carbon Trust website.

Mitigation

Climate change demands responses from society that can be grouped into two distinct categories: mitigation and adaptation. Mitigation actions act to reduce climate risk by reducing the hazard (in this case, reducing GHG emissions that reduce the probability of occurrence of an extreme weather event). It is recommended that there is synergy between mitigation and adaptation actions to increase cost-effectiveness, social benefits, and make the socioeconomic system less carbon intensive and at the same time more resilient.

See also: GHG; Adaptation; Low Carbon Economy. | References: AdaptaClima, IPCC, 2007.

MRV

Monitoring, reporting and verification (MRV) is a set of actions established under the UNFCCC for developing country members of the convention to report and implement actions regarding GHG emissions and removals. A MRV system allows the UNFCCC to have reliable, transparent, and complete information about countries’ actions, emissions, and the support they receive, so that it can then understand the levels of emissions and efforts being made. An MRV system contains several components, such as the National Communication, the Biennial Update Report (BUR), and the International Consultation and Analysis (ICA). Countries that receive funds from reducing deforestation and forest degradation must also submit an MRV annex for REDD+ actions to the BUR. A transition is currently underway in the transparency system for climate action as a result of the Paris Agreement, which established the Enhanced Transparency Framework (ETF). The ETF has created a set of modalities, procedures, and guidelines (MPGs) that must be implemented by countries in the coming years. One of the changes concerns the replacement of BURs with Biennial Transparency Reports (BTRs). The term MRV may sometimes be mentioned in a slightly modified form. Monitoring can be referred to as measuring or measurement, while reporting in some cases is referred to as reporting.

See also: UNFCCC; GHG; National Communication. | Reference: UNFCCC.

Climate Change

Climate change is a change in climatic phenomena such as temperature, precipitation, and cloudiness, which interferes with and modifies the climatic characteristics of the planet. While certain climate changes may be caused naturally, the greatest concern of scientists and the international community is with anthropogenic climate changes, those that are the result of or accelerated by human actions.

NDC

Nationally Determined Contribution is the commitment made by each signatory country of the Paris Agreement, presenting the efforts they intend to undertake for the reduction of greenhouse gas (GHG) emissions and adaptation to the impacts of climate change. Brazil submitted its first NDC in 2015 with a commitment to reduce GHG emissions by 37% by 2025 and an intention to achieve 43% reduction by 2030, both compared to 2005 base year levels. According to the agreement, every five years countries must present a new version of the document with more ambitious targets. In December 2020, Brazil presented the update of its NDC, in which it confirmed the previous targets for the years 2025 and 2030, and included the intention to achieve climate neutrality by 2060. This new version, however, has been criticized by experts, since it used as a basis for calculation an update of the national inventory of GHG emissions that raised the level of emissions from 2005. Thus, by maintaining the previous percentages for 2025 and 2030, the volume of emissions that must be achieved in those years is less than that foreseen in the previous version of the commitment.

See also: Paris Agreement; Greenhouse Gases; Emissions Inventory.

Climate Neutrality

It refers to the idea of achieving zero net emissions of GHGs by balancing emissions and absorptions of these gases. In other words, having zero net emissions does not mean zero GHG emissions, but rather that emissions will be equal to or less than removals (realized, for example, by forests and oceans). The UNFCCC launched an initiative in 2015 to encourage countries to take action to achieve climate neutrality in the world by 2050, and since then some countries have already set their own targets related to this goal. The new version of the Brazilian NDC, presented in 2020, established an intention to achieve climate neutrality in the country by 2060, but with no formal commitment.

See also: UNFCCC; GEE; NDC. | Reference: UNFCC.

Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) are a set of 17 goals, which break down into 169 targets and reflect the three dimensions of sustainable development: social, economic, and environmental. They are one of the main foundations of the 2030 Agenda and their achievement is considered essential to eradicate extreme poverty in the world. They should guide countries’ efforts toward a more just society. The SDGs were established by the United Nations in 2015, as a development and deepening of the Millennium Development Goals (MDGs), a set of eight guidelines also known as “Millennium Development Goals”, which had been established in 2000, with 2015 as the implementation horizon.

See also: Agenda 2030. | Reference: Agenda 2030.

SDG

See also: Sustainable Development Goals (SDGs); Agenda 2030. | Reference: Agenda 2030.

United Nations Environment Programme (UNEP)

Created in 1972, the United Nations Environment Programme (UNEP) is a specialized UN agency dedicated to protecting the environment and promoting sustainable development. UNEP is based in Nairobi and is the leading global environmental authority. It is currently active on a broad agenda of issues, encompassing ecosystems, education, forests, and resource efficiency. UNEP funds and implements projects on all continents, with the possibility of partnerships with governmental and non-governmental organizations, and receives voluntary contributions.

Reference: UNEP.

Kyoto Protocol

Signed during the COP III, in 1997, the Kyoto Protocol was the first international document to establish greenhouse gas emission reduction targets for its signatories. Unlike the Paris Agreement, signed in 2015, the Kyoto Protocol did not provide for individual targets, but rather a 5% reduction target, aimed only at developed countries, grouped in Annex I of the Protocol. Since the Protocol foresaw that it would come into force only after ratification by countries that accounted for 55% of global emissions, its validity only began in 2005, after Russia signed it. The United States did not ratify the Protocol, and in subsequent years, countries such as Japan, Canada, and Australia also withdrew from the commitment. The Protocol provided for the creation of market mechanisms, such as Clean Development Mechanisms (CDM).

See also: COP; Clean Development Mechanism (CDM). | Reference: UNFCCC.

Green Recovery

The term emerged in the context of the coronavirus pandemic crisis to propose economic recovery as the opportunity for transition to a low-carbon, resilient, and inclusive socioeconomic model. According to OECD data, member and partner economies have already allocated $336 billion for environmental measures in their Covid-19 recovery packages.

Reference: UNFCCC.

REDD+

An instrument developed under the United Nations Framework Convention on Climate Change (UNFCCC) to financially reward developing countries for their achievements in reducing greenhouse gas emissions from deforestation and forest degradation, as well as for conserving and enhancing carbon stocks in forests and their sustainable management. Payments, derived from multiple sources, are received from the recognition of measured, reported, and verified reduced emissions from policies, programs, projects, and actions taken at multiple scales.

See also: Carbon Credit, Article 6, Deforestation. | Reference: Decree No. 10,144 of November 28, 2019.

Carbon Sequestration

Sequestering CO2 from the atmosphere can happen in two ways: by increasing natural carbon sinks, whether terrestrial or oceanic, and by using chemical engineering techniques. Each forest formation, considering its unique soil and flora characteristics, presents a different potential for capturing and storing carbon dioxide from the atmosphere, so that the reforestation of degraded areas and the correct management and conservation of green areas are relevant for the mitigation of greenhouse gases. In the ocean, carbon is naturally captured from physical processes, related to deep water circulation, and biological processes, through the photosynthesis of marine organisms such as phytoplankton.

See also: Carbon Credit; Climate Neutrality; Deforestation. | Reference: IPCC AR5.

SISNAMA

It stands for National Environmental System. SISNAMA was established by Federal Law 6938/81 and is a set of agencies and entities of the Union (Ministry of the Environment, CONAMA, IBAMA, etc.), the States, the Federal District, the Municipalities, and the Foundations established by the Public Power, responsible for the protection and improvement of environmental quality, through the fulfillment of constitutionally provided principles and established rules. This integration of entities from all the federative spheres gives the states and municipalities a certain autonomy in the environmental protection and improvement of their regions.

See also: CONAMA; IBAMA; ICMBio.

Nature-based solutions
Nature-based solutions are actions inspired and supported by nature that aim to protect, manage, and restore natural and modified ecosystems in a sustainable way, and to address societal challenges in a resilient and adaptive manner, providing simultaneous benefits to human well-being and biodiversity. Some examples of SbN are ecosystem restoration and conservation, climate adaptation services, and investment in natural infrastructure, among others.

Reference: Recommendations of the Task Force on Climate Change Financial Disclosures.

Task Force on Climate-related Financial Disclosures (TCFD)

The Financial Stability Board has created the Task Force on Climate-Related Financial Disclosures (TCFD) to improve and increase climate-related financial disclosure. As financial markets need clear, comprehensive, and high-quality information about the impacts of climate change, the goal is to enable the inclusion of the risks and opportunities presented by rising temperatures, climate-related policies, and emerging technologies. Among the expected benefits of improved standardization in disclosure are better assessment of risks inherent to climate change, better strategic planning of companies and funds in the short, medium, and long term, and better capital allocation, considering both positive and negative impacts of anticipated changes.

Reference: Recommendations of the Task Force on Climate Change Financial Disclosures.

Green Bonds

A green bond is a fixed income instrument designed specifically to support environmental or climate-related projects. Green bonds usually come with tax incentives to increase their attractiveness to investors. These securities are usually asset-linked and backed by the balance sheet of the issuing entity. Therefore, they generally carry the same credit rating as the other debt obligations of their issuers. About $157 billion in green bonds were issued in 2019.

Reference: www.investopedia.com/terms/g/green-bond.asp.