Abstract
The Development Finance Institutions (DFIs) must respond to the ongoing structural changes imposed by the new economy of the twenty-first century. These institutions should update procedures and foster the implementation of better practices by other economic agents. The Brazilian Development Bank (BNDES) case demonstrates that DFIs can develop tools that address these new challenges. We present the BNDES Impact Thesis for Investment on Projects (TIIP), a methodology to evaluate the expected impacts of development projects in nonfinancial variables such as knowledge and sustainability. It is inspired by the BNDES Methodology to Evaluate Companies (MAE), a tool to assess the client’s intellectual capital in the concession of credit. Both methodologies translate a complex reality into an easy-to-read framework, which expands a manager’s decision-making criteria to variables beyond the financial ones. Based on a case study, we detail the TIIP methodology to demonstrate it is a powerful instrument to adapt the BNDES to the challenges of the new economy. It translates nonfinancial benefits to a banking language and identifies opportunities to improve investment projects and enhance its benefits to development. The TIIP is a useful guideline for BNDES’ action and a strategic tool to deal with the new economic challenges.
In a world flooded with irrelevant information, clarity is power
Yuval Noah Harrari
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Notes
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Socially responsible investments grew by 34%, reaching $30.7 trillion globally over the past 2 years. Groups of investors (owning more than $33 tri in assets) have been engaged in fostering green responsibility in the capital market (e.g., Climate Action 100+, the IIGCC, and PRI). See: https://www.dw.com/en/myopic-stock-markets-deter-green-investments/a-49248966, https://climateaction100.wordpress.com/about-us/ and https://www.reuters.com/article/us-climatechange-investors/investors-managing-32-trillion-in-assets-call-for-action-on-climate-change-idUSKBN1O80TR
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Practices in organizations such as the OECD (2007), European Parliament (2015), European Commission (Helming 2009; Bach et al. 2008), International Finance Corporation (IFC) (World Bank 2007), the Brazilian Innovation Agency, Finep (Cavalcante and De Negri 2013), DAC—Development Assistance Committee (OECD 1991), Pricewaterhouse (PWC 2013), World Economic Forum (Drexler et al. 2014), and the KfW (2013).
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For more details of those initiatives see Arantes et al. (2018).
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For more details of those initiatives see https://agenciadenoticias.bndes.gov.br/detalhe/noticia/BNDES-aposta-nas-fintechs-para-ampliar-acesso-ao-credito-de-micro-e-pequenas-empresas/
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de Almeida, H.T.V., Braga, J.P.C.d.H. (2020). The Brazilian Development Bank Impact Thesis: A Methodology to Address the Development Goals of the Knowledge and Sustainable New Economy. In: Matos, F., Vairinhos, V., Salavisa, I., Edvinsson, L., Massaro, M. (eds) Knowledge, People, and Digital Transformation. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-030-40390-4_16
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