Rule only applies in 2023, but companies already include ESG data on their balance sheets

The first season of 2022 financial statements brought changes that can be observed in the companies’ operational data, such as information related to environmental, social and governance risks, the well-known ESG.

This move is part of an adaptation process that publicly traded companies will have to make until 2023 due to the change made by the CVM (Brazilian Securities and Exchange Commission) to Instruction 480/09, in December 2021, which requires Brazilian companies to submit these indicators, in addition to an inventory of greenhouse gas emissions (GHGs) and provide information regarding the diversity of the body of managers and employees.

Carlos Miranda, founding partner of X8 Investimentos, says that this movement is happening because investors are increasingly inclined to choose companies with an ESG agenda, “penalizing those that are not sustainable”.

Marcelo Oliveira, CFA and founder of Quantzed, also states that “those [companhias] who do not comply with the rules will have to be more efficient in ecological terms because more and more people are going to look for this type of company”.

For experts, as the ESG topic is already on the agenda, companies will have no problem adapting to report this data. They point out that it is just a matter of organizing the information that is already available for the account not only of investors but also of consumers who consider these

Oliveira believes that if the obligation did not come from Organs regulatory bodies, investors and society would already provoke this change.

The CVM’s resolution will come into effect on January 2 next year. In this sense, the information to be disclosed after the date will still be based on the fiscal year ended in 2022, that is, the annual and fourth quarter financial statements will already have ESG data.

example from outside

In Europe, since 2021, managers have had to adapt to the Sustainable Finance Disclosure Regulation.

“Designed to fight the call greenwashing (companies that use pro-environment speech, but in practice do the opposite), the regulation imposes a uniform set of disclosure standards, known by the acronym SFDR (SFDR).Sustainable Finance Disclosure Regulation)”, says the founding partner of X8 Investimentos.

According to the European Union’s action plan, the increase in natural disasters related to weather phenomena means that companies will have to prepare for an increase in costs. “An increase in global temperatures by 2 degrees centigrade could have destabilizing effects on Europe’s economy and financial system.”

And, in this way, banks will also be exposed to greater losses due to the lower profitability of companies, more exposed to climate change or heavily dependent on increasingly scarce natural resources.

In the United States, explains Oliveira, since Gary Gansler took over as president of the SEC (North American Securities and Exchange Commission) in 2021, he has been advocating that institutions take social and climate-related issues into account in their regulatory policy. .

The difference between Brazil and the US is that no company abroad is obliged to disclose its information, however, many already carry out surveys and share it with investors.

At the SEC, there is a proposal for US-listed companies to disclose a number of risks related to climate and greenhouse gas emissions. The move is part of President Joe Biden’s effort to unite global efforts to prevent climate-related catastrophes.

But the opposition, according to Oliveira, says this proposal would disrupt current disclosure guidelines, without establishing a system that would be efficient for reporting climate impacts.

The founder of Quantzed believes, on the other hand, that if the SEC passes the law, other bodies will begin to structure similar measures. “As we live in an increasingly conscious world, it makes perfect sense [os órgãos obrigarem as companhias à divulgarem os aspectos ESG]”.

*With information from Reuters