Sustainable Taxonomy in Brazil: What It Is, How to Apply It and How to Unlock Green Credit

Update on September 30, 2026: this article was published before the decree on the Brazilian Sustainable Taxonomy. The TSB was established by Decree 12,705/2025, with initially voluntary adoption and an MRV system (measurement, reporting and verification) being rolled out. See the updated overview in ESG MRV in the Brazilian Sustainable Taxonomy.

The transition to a low-carbon, high-social-impact economy requires clarity, metrics and reliable data. This is the context in which the Brazilian Sustainable Taxonomy (TSB) emerges: a classification system that defines which economic activities can be considered sustainable, giving investors, companies and regulators confidence.

More than a technical tool, the taxonomy will be essential to unlock green credit in the country, giving everyone from large corporations to micro and small businesses access to financing aligned with ESG practices.

What is a sustainable taxonomy? #Link para esta seção

A sustainable taxonomy is a set of criteria that classifies economic activities as sustainable or not sustainable, based on environmental, social and governance aspects.

Its goals are to:

• Standardize ESG concepts and indicators, ensuring comparability across companies and sectors.
• Bring clarity to the financial market, reducing greenwashing risks and strengthening investor confidence.
• Attract domestic and international capital, connecting Brazil to global regulations such as European Union requirements.

Why is the taxonomy strategic for Brazil? #Link para esta seção

1. Access to green capital: companies that meet the criteria will find it easier to obtain credit and raise investment at preferential rates.
2. International competitiveness: alignment with global requirements strengthens Brazil's position in export chains.
3. Regulatory certainty: the system creates predictability for companies and financial institutions, reducing legal and reputational risks.
4. Cascade effect across the value chain: large companies start requiring ESG data from their suppliers, creating a movement that reaches medium, small and micro businesses.

How to apply the sustainable taxonomy in practice #Link para esta seção

Applying the taxonomy is not just a compliance matter; it is a business strategy.

1. Mapping the operation #Link para esta seção

• Identify which of the company's activities meet the taxonomy criteria.
• Carry out a carbon inventory and a social and environmental risk assessment.

2. ESG data management #Link para esta seção

• Organize information so it is auditable, traceable and comparable.
• Use digital platforms that centralize data on suppliers, clients and partners.

3. Value chain engagement #Link para esta seção

• Support small and medium suppliers with training and tools so they can also access sustainable credit.

4. Use of technology and innovation #Link para esta seção

• Adopt artificial intelligence and continuous monitoring systems to validate data and reduce the risk of inconsistencies.

How can the taxonomy unlock green credit? #Link para esta seção

Today, one of the biggest barriers to sustainable finance is the lack of reliable data. Banks and investors need clear information to assess risks and release funds.

With the taxonomy, it will be possible to:

• Reduce information asymmetry between large and small companies.
• Offer financial incentives such as lower rates for those who prove good ESG practices.
• Speed up credit analysis with standardized data and integrated platforms.
• Attract international investment, since global investors look for assets aligned with clear and comparable criteria.

Challenges and next steps #Link para esta seção

Despite its potential, implementing the sustainable taxonomy in Brazil still faces challenges:

• Regulatory pace: given the complexity of the market, adapting to the rules is expected to take 2 to 3 years and will happen gradually, in cycles.
• Market readiness: small businesses still struggle to structure ESG data.
• Database integration: information from public and private bodies will need to be connected to ensure quality and traceability.

Market voice: Luiz Pires of Anbima #Link para esta seção

"The taxonomy is a fundamental tool for the capital markets to identify the activities that need financing for Brazil's environmental and socioeconomic transition to a low-carbon economy," says Luiz Pires, Sustainability and Innovation Manager at Anbima (Brazilian Financial and Capital Markets Association).

The future of sustainable finance in Brazil and ESGreen's contribution #Link para esta seção

The Brazilian Sustainable Taxonomy is a milestone on the path to making the country a benchmark in green finance. More than a rule, it is an instrument of competitiveness, access to capital and innovation.

Companies that get ahead and structure their ESG data will have a strategic advantage: they will be ready to capture green credit, meet global requirements and grow sustainably.

This is where ESGreen makes the difference. The ESG risk management platform turns reliable data into clear, measurable and fast decisions. From a single dashboard, it automates the screening of suppliers, clients and partners, delivering ESGreen Score, continuous monitoring and Evidence Assessment by CNPJ (Brazilian company registration number), auditable evidence and alerts that anticipate risks and opportunities.