Brazilian bank Itaú Unibanco's $250 million bond directs capital towards biodiversity restoration and the financial inclusion of small business, addressing two critical sustainability priorities in Brazil.

The bond marked a milestone in Brazil’s sustainable finance market as the first international biodiversity-focused bond issued by a Brazilian financial institution.

Structured as a three-year senior bond with two thematic tranches, the issuance allocates $75 million to biodiversity-focused projects that promote regenerative agricultural practices, native vegetation conservation and the recovery of degraded pastureland.

The $175 million social tranche supports financing for micro, small and medium-sized enterprises – including women-led businesses – which make up the vast majority of businesses in Brazil, yet continue to face barriers to accessing credit. A significant share of this tranche will be allocated towards the Brazilian state of Rio Grande do Sul, supporting economic reconstruction following severe floods and landslides in 2024.

Judges of the Environmental Finance Sustainable Debt Awards praised the bond’s structure as a “landmark case study in how private sector banks can practically underwrite and manage natural capital risks”.

Others highlighted the dual-tranche structure as “clearly targeted, measurable and demonstrably additive to the country’s sustainability goals”.