On October 20, 2023, the Brazilian Securities and Exchange Commission (CVM) published CVM Resolution 193. This resolution, which is part of the CVM’s Sustainable Finance Action Plan for 2023-2024, establishes voluntary permission for publicly traded companies, investment funds and securitization companies to prepare and disclose financial information reports related to sustainability.
The document, which follows the international standard defined by the International Sustainability Standards Board (ISSB), using the IFRS S1 and S2 guidelines, aims to align Brazilian practices with global standards for sustainable finance. This initiative is the first concrete delivery of the Action Plan, which establishes goals, objectives and deadlines based on the Sustainable Finance Policy, reflecting the Brazilian regulator’s commitment to the ecological transformation agenda instituted by the Ministry of Finance.
According to CVM Resolution 193, publicly traded companies, securitization companies and investment funds that choose to adopt the financial information report related to sustainability must start preparing it from the fiscal years beginning on January 1, 2024 and disclose it annually. This date marks the beginning of a cycle in which interested organizations can align their accounting practices with international sustainability standards.
The report, drawn up on the basis of the ISSB standard, must be clearly identified and presented separately from the entity’s other information and financial statements. This approach aims to provide transparency and facilitate specific analysis of sustainability-related metrics, allowing stakeholders to assess the performance of companies and funds in this crucial aspect.
Brazil stands out as the first country in the world to adopt the sustainability-related financial information report issued by the ISSB. It is expected that this report will become mandatory from 2026, consolidating the commitment to conduct financial practices in line with global sustainable principles.