The Brazilian Ministry of Finance and the Comissão de Valores Mobiliários (CVM) have announced that the International Sustainability Standards Board’s (ISSB) IFRS Sustainability Disclosure Standards will be incorporated into the Brazilian regulatory framework, setting out a roadmap to move from voluntary use starting in 2024 to mandatory use on 1 January 2026.
These public authorities signalled that the ISSB’s Standards can help strengthen Brazilian capital markets by enhancing transparency around sustainability-related risks and opportunities and facilitate companies attracting capital and global investments. Brazil has required the use of IFRS Accounting Standards since 2010.
The announcement coincides with the IFRS Foundation Trustees meeting in Panama City, during which IFRS Foundation Trustees and staff met with representatives of key stakeholders in the region.
The Inter-American Development Bank and Latinex co-hosted an event focused on the role IFRS Accounting and Sustainability Disclosure Standards can play in delivering a more resilient, sustainable and competitive financial sector in the region, so that it can face the challenges of the future, with the Panamanian Minister of Commerce and Industry addressing the event.
Furthermore, the Panamanian Banking Association and the Ministry of Economy and Finance held a dinner during which Erkki Liikanen, Chair, IFRS Foundation Trustees provided an address. He reflected that the meetings were being held in the run up to Latin America and the Caribbean Climate week, which provides a stark reminder of the urgency of the work to advance climate-related disclosures, given the increasing risk climate poses to capital markets in the region.
On 18 October, ISSB Chair Emmanuel Faber met with the Association of Supervisors of the Bank of the Americas during its annual high-level meeting, during which they discussed how enhanced sustainability-related disclosures, through the ISSB’s Standards, would benefit the banking sector by providing more reliable and comparable data around emerging risks and opportunities.
During the week, the Superintendency of Banks of Panama announced its support for the ISSB and a commitment to promoting use of the ISSB’s Standards by regulated entities.
Last month, the IFRS Foundation published the Spanish translation of IFRS S1 so that companies across Latin America could begin using the Standard, with the IFRS S2 translation to follow soon. The Portuguese translation is also expected in the coming months.
Latin American jurisdictions have been at the forefront of mandating sustainability-related financial disclosures. Both Chile and Colombia have mandated the use of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and SASB Standards, which the ISSB’s Standards build upon. National standard-setters in Mexico are also publicly discussing plans for the use of the ISSB’s Standards.
Source: Brazil Joins Growing List of Jurisdictions Mandating Sustainability Reporting – ESG News
About the Authors
Associate Director, Investment Banking
Prachurjya has over 16 years of experience in investment banking with Acuity Knowledge Partners. At Acuity, he has led sector and product-specialist pilot teams across Capital Markets, ESG, Debt Advisory, Loan Syndications, Metals & Mining and Real Estate. He has been actively involved in setting up and on-boarding new ESG Advisory, ESG DCM and Sustainable Finance teams for various bulge bracket investment banks. Within DCM and Rating Advisory, he has been instrumental in helping the clients achieve over 30% in annual savings on both regular and adhoc tasks through standardization of the outputs and deployment of our proprietary BEAT tools.
Delivery Manager, Investment Banking
Puja has 7 years of extensive experience in ESG, Climate Change & Sustainability and she is supervising the ESG team at Acuity. She also has diverse experience in conducting ESIA, EHS compliance audits, ESG Risks and Controls, EHS & ESG Due Diligence assessments. Prior to joining Acuity, she was working with companies like KPMG Global Services, EY India and ERM India. She has expertise in provisioning extensive research requirements for clients through preparation of Peer Benchmarking, Target Compilation, Sustainability report, Sustainable Finance Updates and Sectoral ESG Thematic Detailing Engagement.
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