The Brazilian Ministry of Finance and the Comissão de Valores Mobiliários (CVM) have jointly announced their intention to integrate the IFRS Sustainability Disclosure Standards from the International Sustainability Standards Board (ISSB) into the Brazilian regulatory framework. This initiative outlines a phased approach, transitioning from voluntary adoption starting in 2024 to mandatory use on 1 January 2026.
These governmental entities have highlighted that the ISSB’s Standards will play a pivotal role in fortifying Brazil’s capital markets by amplifying transparency regarding sustainability-related risks and opportunities. Furthermore, they will facilitate companies in attracting capital and global investments. It’s worth noting that Brazil has mandated the use of IFRS Accounting Standards since 2010.
The newly introduced reporting requirements are a part of Brazil’s Ecological Transformation Plan, a strategic effort launched earlier this year to promote the shift towards a green economy. This plan also encompasses a substantial commitment of $350 billion in both public and private infrastructure investment.
Brazil’s Minister of Finance Fernando Haddad said:
“This will generate a virtuous cycle of greater transparency and commitment, allowing the possibility of measuring the issue, because there needs to be a global institutional metric, so that the market is global.”
Reflecting on the announcements, ISSB Chair Emmanuel Faber said:
We continue to hear strong support for the ISSB’s Standards from regulators globally and I commend the Brazilian Ministry of Finance and Comissão de Valores Mobiliários for providing clarity to companies and investors in Brazil by setting out a clear roadmap towards mandatory adoption.
I also want to thank our partners in Panama for their hospitality this week and the steps they are taking to introduce the ISSB’s Standards locally.