CVM invites comments on disclosure improvements regarding ESG
18/12/2020
| On December 7, 2020, the Brazilian Securities Commission (Comissão de Valores Mobiliários) published a public hearing proposing amendments to the CVM Rule No. 480/09 with the purpose of improving the rules on disclosure of environmental, social and governance matters (also known as “ESG”) required from publicly-held companies in Brazil. The hearing also proposes other amendments designed to reduce the regulatory burden imposed on publicly-held companies with respect to disclosure requirements. CVM is welcoming comments on the proposed amendment until March 8, 2021. TRW invites its clients who are interested in discussing and contributing to the development of the proposed regulation to reach out to members of our team who are coordinating comments on CVM’s proposal. |
Main Proposed Amendments Regarding ESG
- CVM recognized a growing interest among investors and the market with respect to ESG-related information and made it clear that it is considering more robust and rigid ESG initiatives in the future.
- In addition to suggesting improvements to the ESG-related disclosure rules currently applicable in the reference form, should the amendment proposal is implemented, publicly-held companies will be required to disclose: (i) aggregate date regarding diversity within its management structures; (ii) indication of the channels, if any, through which critical environmental and social matters may be brought to Board of Directors’ attention; (iii) whether management compensation is affected by environmental and social factors; and (iv) information on work force’s diversity and pay gaps.
- With respect to the improvements of current ESG-related disclosure rules, publicly-held companies will also be required to report on: (i) risk factors related to social, environmental and climate matters on separate and autonomous categories; (ii) the adoption of a matrix of materiality and key performance indicators (KPIs) related to environmental and social matters or the lack thereof; (iii) which Sustainable Development Objectives issued by the United Nations are relevant to their business environment; and (iv) in case they do not publish sustainability reports or equivalent documents or, in case they do not adopt KPIs for environmental and social matters, an explanation as to the reason why they do not publish or adopt same.
Other Amendments
- Despite the increase of disclosure requirements in connection with ESG-related information, CVM proposes several amendments designed to reduce the compliance cost related to the reference form, which has to be periodically updated by publicly-held companies. These amendments attempt to remove from the reference form information which has already been disclosed in other mandatory documents, to reduce the issuers’ efforts used to produce the reference form and to make the document more user-friendly.
Share on Social Media
