Brazil has declared it will enforce the ISSB sustainability standards, kicking off voluntary compliance in early 2024 before making it obligatory from 1 January 2026.
According to Corporate Disclosures, this groundbreaking announcement arrived on 20 October, as both the Brazilian Securities Commission (CVM) and the Ministry of Finance confirmed that these international benchmarks, known as IFRS S1 and IFRS S2, will be integrated into the national regulatory fabric.
The strategic move positions Brazil at the forefront of global sustainability efforts, marking it as the first nation to officially adopt these reporting rules.
Under the newly issued Resolution 193, the CVM will permit public companies and investment funds to start disclosing sustainability-centric information via these standards, commencing in 2024.
CVM president João Pedro Nascimento celebrated this development, stating, “Resolution 193 is a milestone for CVM and for Brazil. We are the first regulator and country in the world to adopt sustainability reporting rules, following IFRS S1 and S2 standards. We are starting with voluntary disclosure of sustainable aspects by issuers, with greater transparency, standardisation and comparability.”
From 2026, once these standards are obligatory, ISSB-aligned sustainability reports will need reasonable assurance, signifying a deepened commitment to not just reporting but also verifying sustainable practices.
Addressing the IFRS Sustainability Standards Advisory Forum in Frankfurt on 23 October, Vania Borgerth, a representative of the Brazilian Committee of Sustainability Pronouncements (CBPS), explained that the interim period until 2026 is designed to allow corporations adequate time to gear up for comprehensive reporting and assurance demands.
The CBPS, formed in the previous year as an adjunct to the Brazilian Accounting Pronouncements Committee, has been instrumental in rolling out sector-specific working groups and an educational faction to instil the ISSB’s capacity-building agenda throughout Brazil.
While the initial year of voluntary disclosure will utilise the standards’ English iterations, Portuguese translations, courtesy of the ISSB, are on the horizon, with completion anticipated in the ensuing months.
The ISSB has lauded Brazil’s regulatory bodies and administration for this progressive commitment. Vice-chair Sue Lloyd recognised Brazil’s “great leadership” in the region, and chair Emmanuel Faber applauded both the Brazilian Ministry of Finance and CVM, asserting, “I commend the Brazilian Ministry of Finance and [CVM] for providing clarity to companies and investors in Brazil by setting out a clear roadmap towards mandatory adoption.”
Copyright © 2023 RegTech Analyst
Copyright © 2018 RegTech Analyst
