3rd International Conference on Energy and Environment: bringing together Engineering and Economics Porto, Portugal 29-30 June, 2017 PRACTICES OF SOCIAL AND ENVIRONMENTAL RESPONSIBILITY ADOPTED BY FINANCIAL INSTITUTIONS Evandro Bonetti, 1* Antônio Zanin 1 , Sady Mazzioni 1 and Paulo Afonso 2 1 Department of Social and Applied Sciences, Unochapecó, Brazil 2 Department of Production and Systems, University of Minho, Portugal * Corresponding author: ebonetti@unochapeco.edu.br, Unochapecó, Av. Senador Attílio Fontana 591, Chapecó-SC, Brazil KEYWORDS Sustainability, Environmental Responsibility, Environmental Accounting, Financial Institutions ABSTRACT Nowadays, there is a global pressure for agencies with responsibilities in public investment to evaluate their policies and impacts in terms of the economic, social and environmental dimensions, avoiding supporting projects that pose risks to these aspects, thereby making it possible to improve the quality of life of the populations and long-term economic stability. The objective of this study was to verify the guidelines that guide the socio-environmental responsibility policies (SERP) of Brazilian financial institutions. The research was based on the analysis of sustainability reports of development agencies and development banks. The socio-environmental policies of the institutions were also analyzed under the light of the resolution of the National Monetary Council that regulates these issues. It was possible to verify that most financial institutions have socio-environmental policies as a result of the regulation that determines the mandatory nature of such policies. Indeed, more than ¾ of the studied institutions published their SERP after such regulation. Thus, the institutionalization of these practices might be understood from a process of normative isomorphism. INTRODUCTION In the financial sector, sustainability concerns are focused on generating criteria for lending policies that seek to ensure that the available funding resources are not used to finance projects that have negative social or environmental impacts. This type of action is encouraged by the determinations of the “Equator Principles” being valid due to the neglected relevance of the socio-environmental impacts caused by financial activities. In Brazil, socio-environmental concerns in financial institutions are not a new issue. There are recommendations published in the year 1997, but we can highlight Resolution 4327 of April 25, 2014, issued by the National Monetary Council (NMC), which established the guidelines to be observed by the institutions regulated by the Central Bank of Brazil (CENBA) in its Social and Environmental Responsibility Policies (SERP) as a definitive landmark for these issues. According to this resolution, financial institutions should maintain governance structures compatible with their size and with the products and services offered in order to ensure compliance with the guidelines established by their socio- environmental responsibility policy. In order to guide the process of preparing sustainability reports, the Global Reporting Initiative (2014) created the GRI Guidelines for Sustainability Reporting based on the following principles: inclusion of stakeholders, context of sustainability, materiality and completeness; complemented by: balance, comparability, accuracy, timeliness, clarity and reliability. Furthermore, the Equator Principles (EP) refer to a set of criteria required by the International Finance Corporation (IFC), which is a World Bank body used to regulate investments in socially responsible projects. According to the Equator Principles Association, the EP forms a framework adapted to be used by financial institutions that has been adopted by 80 organizations with activities in 35 countries. In addition, the purpose of these principles is to evaluate and manage socio-environmental risks in the projects developed by the institution, mainly being used as a decision support tool. The EP represent an attempt, at a global level, to standardize the accounting records of socio-environmental risks in the financial statements, which, in addition to allowing systemic management of these risks, also ensures an equal demand for all global financial system players regarding capital allocation to cover socio-environmental risks. In addition to their direct impacts, EP encourage institutions to apply other socio-environmental practices such as carbon credits (US), and climate principles (worldwide), seeking to link this sector with other organizations from different sectors in order to form a sustainable network. The Brazilian Financial System is compounded by organizations such as banks, insurance companies, financial institutions, with public or private control, with strong state intervention through specific laws and regulations, and a regulatory body that is the Central Bank of Brazil (CENBA). All these organizations needed a high initial investment to enter in the sector. In Brazil, financial institutions develop commercial development projects to meet the financial needs of the public and private sectors in project financing, which allows the beneficiaries to improve their economic