This is part two of a series of blogs by the IFoA Data Science, Sustainability and Climate Change Working Party that discusses progress updates on UN SDGs and AI use. This blog focuses on Brazil.
Adopted in 2015, the United Nations’ Sustainability Development Goals (UN SDGs) are a voluntary set of 17 targets for governments around the world. They aim to address a wide range of challenges including poverty, climate change and gender inequality by 2030.
Given the ongoing popularity and focus on AI, there is a broader question of whether AI can be used to help accelerate progress for each UN SDG. (Source: World Economic Forum) For example, the annual AI for Good Summit recognises the potential benefits AI solutions can have to both address any current problems and accelerate UN SDG progress.
This blog aims to look at both local UN SDG and AI progress in Brazil, and how AI solutions are being used to progress local SDG development.
In August 2024, the UN and the Brazilian government signed a new UN Sustainable Development Cooperation Framework (UNSDCF) 2023 to 2027. It aims to provide “a coherent, strategic direction for UN development activities by all UN entities at country level”. (Sources: UNODC, UNSSC) The framework identifies five key areas:
The question of sustainability within Brazil is being explored by other organisations too. For example, a 2023 World Bank report “explores how prudent actions today can generate opportunities for a more prosperous, inclusive, and sustainable society over the next 20 years” in Brazil. (Sources: World Bank article, World Bank report)
The report discusses six areas of reform to promote sustainable growth and inclusivity including:
(Source: World Bank article)
Promotion of the UN SDGs within Brazil dates back to 2016 with the formation of the local National Commission of the SDGs by presidential decree. (Sources: Brazil government, Global Observatory on Local Democracy and Decentralisation)
The commission has various aims including dissemination, internalisation, adoption and monitoring of the 2030 agenda across Brazil. The UN SDGs were transposed locally across a range of methods including the adoption of new laws and decrees (in Barcarena), and the creation of working groups (in Paraná, São Paulo and the Federal District). (Source: Global Observatory on Local Democracy and Decentralisation)
Despite this, currently Brazil is ranked 52nd globally in terms of progress, with an overall score of 73.8 out of 100. (Source: https://dashboards.sdgindex.org/static/profiles/pdfs/SDR-2024-brazil.pdf)
Several of these SDGs are classified as facing major challenges including SDG 10 (reducing inequalities), SDG 15 (life on land) and SDG 16 (peace, justice and strong institutions).
Brazil is actively engaged in a range of projects to achieve UN SDGs that include the following.
Reforestation projects in Brazil include the Rioterra and Black Jaguar Foundation initiatives. Rioterra has reforested an area equivalent to Manhattan over the past decade. It plans to more than double that by 2030 and spend annually around USD 2.4 million. The Black Jaguar Foundation is more ambitious and is planning to spend at least USD 3.7 billion on forest restoration by 2030. (Source: Reuters)
Initially presented by Brazil at COP28 last December, the recent launch of the innovative Tropical Forest Finance Facility is receiving a positive response worldwide. (Sources: Capital Reset, Reuters, Rio Times) The initiative aims to raise USD 125 billion from governments and private investors. These funds would then be invested in higher-yield portfolios, with the returns used to compensate countries for preserving their tropical forests.
There are several other reforestation initiatives notably Amazonia Live. Announced in 2017 at the Rock in Rio music festival in Brazil, it aims to reforest around 12 million hectares of land by 2030 via donations and partnerships. (Sources: Conservation International, Conservation International)
Most of Brazil’s electricity demands are supplied by cleaner energy sources. In 2023, around 60% was sourced by hydropower, 8% by biofuels, 13% by wind and 7% by solar. (Source: International Energy Agency)
The digital platform Mídia Índia was formed to give a voice for local indigenous people. (Source: If Not Us Then Who?)
Catadores de Materiais Recicláveis are informal waste pickers. They pick, sort and resell recyclable materials such as paper, plastic and glass from homes, businesses and landfills, hence promoting a circular economy. (Source: Brazil government)
Brazil issued USD 7.2 billion corporate sustainable bonds in 2022, and USD 2 billion sovereign sustainable bonds in 2023. (Source: World Bank). Continuing this trend, Brazil is exploring social impact bonds. These are innovative investment vehicles with the aim of addressing social challenges. Brazil has tried to launch these bonds in the past including around 2016 and 2020. Due to timings (elections and COVID-19) this initiative is still yet to officially launch. (Source: Government Outcome Labs)
Brazil ranked 32rd in the world with an overall score of 63.70 out of 100 on Oxford Insights’ Government AI Readiness Index and similarly 50% on IMF’s AI Preparedness Index. Both indices show indicative progress for AI adoption at country level. (Sources: Government AI Readiness Index 2023, IMF)
In 2021, Brazil launched its National Strategy for Artificial Intelligence (locally known as Estratégia Brasileira de Inteligência Artificial, or EBIA for short) which is aimed at promoting the development and use of AI in Brazil. The strategy focuses on a range of areas on AI including ethics and governance, fostering education and training, international collaboration, research and development, and removing barriers to innovation. (Sources: Brazil government, OECD, OECD, STIP Compass) But a report in 2022 by the Federal Court of Accounts found that EBIA was “not specific, measurable, realistic (achievable)”. (Source: Global Government Forum)
More recently, towards the end of July 2024, the Brazil government announced an investment plan from 2024 to 2028 focusing on AI, in particular sustainable- and socially-oriented technologies, by pledging about USD 4 billion. Brazil is aiming to be self-reliant on AI technology and move away from its current dependency on importing such knowledge, resources and technologies, with its president stating “Instead of waiting for AI to come from China, the US, South Korea, Japan, why not have our own?” The investment plan will cover sectors such as public health, agriculture, environment, business and education, having a wider benefit to both the environment and society. (Source: Reuters)
In 2023, Brazil led Latin America and the Caribbean in terms of GDP, totalling just over USD 2 trillion. (Source: World Bank) The market size for AI in Brazil is expecting to grow positively, resulting in a market volume of around USD 16 billion by 2030. (Source: Statista) Brazil’s economy is expected to grow by around 2% to 4% dependent on the success of adoption and implementation of AI. (Source: Microsoft)
Brazil is regionally leading the way in terms of AI regulation. The proposed bill 2338/2023, introduced in May 2023, puts an emphasis on transparency and accountability. (Sources: Convington, Holistic AI, Securiti AI, White Case)
Brazil has several local AI projects aimed at promoting the SDGs including:
Launched in 2020, RadarFit is a generative AI-powered app with a unique gamification strategy designed to incentivise health habits. It has over 1 million users. (Source: Microsoft)
For example, Agronow enhances satellite images with AI to provide users enhanced crop data and statistics. (Source: Contxto)
Smart cities use digital innovation and real-time data to improve sustainability and the quality of life for its inhabitants. Progress towards smart cities within Brazil include São Paulo, which has implemented roadmaps that help with safe school routes or prioritisation for pedestrians with disabilities. (Source: World Bank Blogs)
Brazil is using AI to monitor and tackle deforestation and protect and preserve local wildlife. For example, Project Guacamaya uses a range of AI models for satellite analysis, camera trap analysis and bioacoustics. (Source: Microsoft)
There are several opportunities for local actuarial innovation in Brazil that align with the SDGs.
Microinsurance is insurance tailored at low-income individuals who would not normally have access to such products. Mapfre na Favela is an initiative to promote microinsurance services with the local favelas, based on preliminary dialogue and research with the impacted community. Sustainability is one of the core pillars of this initiative. According to the 2022 demographic census, around 16 million people lives in favelas. (Source: MAPFRE)
Insurers such as AXA and Zurich have backed local reforestation projects
For example, in 2021, AXA has committed USD 49m in Brazil reforestation. Similarly, in 2020, Zurich agreed to a targeted, sustainable reforestation project in Brazil. (Sources: Carbon Pulse, Zurich)
In 2016, Swiss Re was the first insurance company in Brazil to issue a weather-indexed parametric policy given Brazil’s dependency on hydropower. Its aim is to provide cover against scarcity of rainfall or flooding. For example, Tokio Marine insures around 70% of Brazil’s solar and wind markets. In 2023, they partnered with Clir, a global market intelligence platform, to improve underwriting processes and provide more suitable insurance. (Sources: India Times, Swiss Re)
Despite innovation, there is perhaps scope for wider education when embracing and incorporating any insurance product locally. For example, Swiss Re profits from insured farms conducting activities, which resulted in their insurance cover being invalidated. (Source: Public Eye)
The views expressed in this post are those of the individual author(s), and not necessarily those of the Institute and Faculty of Actuaries or those of their employer(s). Information within this post is correct as at the date of writing (i.e. end of October 2024). Hence, there may be subsequent updates which are not reflected. Any reader should still reference the underlying legislation and standard, and should there be any conflict, the underlying information in the relevant standard or legislation supersedes any information presented in this post. Please note that this post is not promoting any of the underlying sources used.