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Salles’ departure does not change the government’s environmental policy, executives estimate – 06/23/2021 – Market

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The change in leadership of the Ministry of the Environment, promoted by President Jair Bolsonaro (no party), should not change the federal government’s policy in this area, according to leaders who commented on Ricardo Salles’ resignation this Wednesday (23).

The subject of an STF (Federal Supreme Court) investigation on suspicion of supporting businessmen in the forestry sector, Salles will be replaced by Joaquim Pereira Leite, secretary for Amazon and the ministry’s environmental services.

It is too late for Roberto Klabin, board member of the pulp and paper producer Klabin, a former holder of the Environment program.

“Salles will be remembered as the worst environmental minister in this country,” says businessman and founder of SOS Mata Atlântica and SOS Pantanal, two environmental NGOs.

“His only effort in this position is to do everything to please the president. [Jair Bolsonaro] and try to enter their closest circle, ”the businessman says.

Klabin is one of the signatories to a letter sent this Wednesday (23) to House President Arthur Lear, criticizing the bill, which was described as a failure of environmental policy.

“In this government, the environment is seen as an obstacle to the country’s development. As long as this president thinks and acts like that, nothing will improve and other Sallys will appear. ”

Sergio Leitau, executive director of Instituto Escolhas, an organization for the sustainability of civil society, says that in practice the ministry remains the same, with no policy changes.

“On a huge farm called Bolsonaro by the government, the cowboy left, but the owner of the herd and the administrator of the farm remained. The owner is Bolsonaro, and the minister is Teresa Cristina. [Agricultura]… “

According to Leitao, Salles carried out the actions required by the Ministry of Agriculture, and Christina’s portfolio was a kind of beneficiary of all the actions of the minister.

“New [ministro] whoever considers a follower of the same primer will change nothing. Perhaps what will change is that the theatricality and aggressiveness of former minister Salles made him more unfriendly, but in practice the ministry continues to operate without changing policy, ”he says.

Eugeniu Singer, CEO of environmental consultancy Ramboll Brasil, says the minister left not because of his role in solving environmental problems, but because of suspicions of corruption in his portfolio.

“The project to dismantle environmental control and protection institutions is gaining momentum. Most likely, environmental policy will not change, and the country will again lose the opportunity to play a leading environmental role at the forefront of the world. It doesn’t matter who takes over. “

Paulo Hartung, Executive President of Ibá (Brazilian Tree Industry), said that Brazilian environmental policy has created barriers to Brazilian products around the world in recent years.

“The business sector warned about this, about the need to effectively fight against illegal traffic in the Amazon, about the danger of legislative changes, as stated in a letter from businessmen to Arthur Lear. We must keep an eye on the markets that we conquer. During the climate crisis, we have an opportunity, but we are missing it. “

Luis Fernando Cuaglio, ESG (ecology, social and governance) specialist at Veedha Investimentos, compares this episode to the departure of Ernesto Araujo from Itamarati, replaced by Carlos France, who is considered less radical.

“The fall of Salles is a piranha bull for the herd. The electoral corral of the government is located in the countryside, this is the Brazilian agrarian environment, ”says the specialist.

According to Quaglio, the minister was not unanimous in agribusiness as he was seen as an obstacle to a green economy, damaging the country’s image abroad.

“However, the international market does not really see this image. ESG world [de boas práticas ambientais, sociais e de governança] and the green economy is driven by materiality, not speech, but the government is getting a new lease on life. “

Conrado Magallains, political scientist for Guide, says the exchange does not affect the stock exchange and exchange rate, but gives the government time to better communicate on environmental issues, which could have a positive effect on Brazil. long term.

“If milk [novo ministro] taking a different approach and demonstrating a commitment to the environment is an opportunity for the government to shift and move closer to the vision of Europe and the United States, which have given greater importance to this issue. This is an opportunity to change the image if the government makes more vigorous efforts, ”he says.

“The Ministry of the Environment has not given good news for a long time, and today an environmental agenda is needed and companies are increasingly looking for ESG standards,” says André Perfeito, chief economist at Necton.

Marina Braga, placement manager at BlueTrade, also sees no effect from her dismissal in trading on Thursday (24).

“The market is now ‘ignoring’ these questions and is paying more attention to growth, interest rates and inflation. The exchange in dollars continues to attract the attention of foreigners, and the growth of the Selic rate also helps to bring in money from abroad, ”says Marina.

One of the financial sector executives, who chose not to be named, said that the international market perceives the exchange positively, because Brazil’s image has been undermined. On the other hand, however, whoever replaces Salles follows the same program, which means that nothing will change.

If the country’s environmental agenda follows the path of what she called “climate denial,” she said, boycotts and sanctions will become more frequent and investment will disappear.

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