Nordea Asset Management has lifted its ban on buying Brazilian government bonds with immediate effect following the election of pro-rainforest conservation candidate Lula da Silva as president in Brazil.
Thede Rüst, head of emerging markets debt at Nordea Asset Management, said the move was based on policy announcements from the president-elect, including the expected return of environmentalist Marina Silva in a central policymaking role.
As a result, he said: "Our emerging markets debt team at Nordea Asset Management has decided to lift the quarantine on Brazilian government bonds".
The fund house decided in 2019 to no longer buy Brazilian government bonds for any of its internally managed emerging markets debt strategies.
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This was in response to "the negative financial materiality of continued rainforest destruction", due to policies under previous president Jair Bolsonaro.
Amazon rainforest clearing has risen 75% since Bolsonaro took office in 2019, with 13,000 hectares lost in 2021, the largest annual figure since 2008, according to a New Scientist report.
Lula, by comparison, has campaigned to protect the rainforest. Under his previous period as president between 2004 and 2016, deforestation plummeted by 72%, New Scientist found.
Following positive pledges from president-elect Luiz Inácio Lula da Silva after his election victory on Sunday, Nordea's Brazilian government bond ban has now been lifted.
While refusing to invest in Brazilian government bonds, Nordea did not simply divest and disappear.
In 2020, the fund house became a founding and advisory member of the Investors Policy Dialogue on Deforestation, a collaborative engagement aimed at initiating and coordinating a public policy dialogue on halting deforestation.
