How Brazil is using sovereign bonds and social infrastructure to build urban climate resilience

This case study belongs to a compendium of good practices and success stories in disaster risk reduction shared during the 2025 Global Platform for Disaster Risk Reduction (GP2025). These stories reflect the real-world progress being made by governments, communities, and organizations around the world to reduce risk and build resilience.

Brazil’s cities, especially informal settlements on urban peripheries, are on the frontlines of climate change. Repeated floods and landslides expose fragile infrastructure and deepen inequality. In 2023, Brazil responded by issuing its first US$2 billion sovereign sustainable bond, channeling proceeds into climate adaptation, social housing, and environmental protection. One hundred percent of proceeds from the green bond are allocated to pre-defined “eligible expenditures” tied to the SDGs which is a move designed to boost investor confidence and social impact accountability. 

This landmark bond, the largest of its kind in Latin America at the time, reflects a broader shift in Brazil’s financing strategy: addressing climate risk and social resilience simultaneously. While not directly funded by the bond, the “Living Periphery” (Periferia Viva) initiative, launched by Brazil’s Ministry of Cities, is also a related example signifying this very shift. It targets vulnerable urban neighborhoods with infrastructure upgrades like slope stabilization, drainage systems, and community facilities, all co-designed with residents (UN-Habitat). 

Brazil’s strategy merges fiscal innovation with place-based investments. Instead of top-down megaprojects, the approach emphasizes territorial equity and combining market instruments, global goals and local community building.

Source: Referenced at the Ministerial Roundtable on Financing by the Government of Brazil.