Given the urgency of resources for climate change mitigation and adaptation, this article analyzes the Fundo de Garantia do Tempo de Serviço (FGTS – Brazilian Severance Indemnity Fund) as a potential instrument for climate finance in Brazil, considering its operation, the allocation of its resources, existing socio-environmental criteria, and the possibilities for its use in actions related to climate change. Although originally created as a worker protection mechanism, the FGTS has acquired, throughout its trajectory, an important role as a source of financing for public policies, especially in the sectors of housing, basic sanitation, and urban infrastructure. Action in these sectors establishes a relevant relationship with the challenges imposed by climate change, since such investments can contribute to reducing socio-environmental vulnerabilities and expanding the adaptive capacity of cities in the face of extreme events. The analysis shows, however, that the climate agenda still occupies limited space in the prioritization of the Fund’s resources and that existing mechanisms are not sufficient to systematically demonstrate the climate contribution of the investments made. It is concluded that the FGTS has the potential to assume a more structured role in Brazilian climate finance, and that progress is needed in defining climate objectives and in mechanisms for planning, monitoring, and evaluating results.
