Brazil Regulator Reverses Mandatory Sustainability Reports

Overview

• The Comissão de Valores Mobiliários (CVM) voted in an extraordinary meeting on May 29 to revoke the rule that would have made sustainability and climate reports mandatory for listed companies.
• Under the new resolution CVM 244, companies may choose whether to publish sustainability reports but those that do must follow CBPCS rules based on ISSB standards.
• The Finance Ministry’s carbon‑market office and the Procuradoria‑Geral da Fazenda Nacional are reviewing whether the CVM followed required procedures and may seek action if they find irregularities.
• Investor groups, auditors and accounting bodies called the rollback a regulatory step backward, while Abrasca and some companies praised the decision as protecting firms from disproportionate compliance costs.
• The reversal raises uncertainty for firms that already spent money preparing for mandatory reporting and could weaken comparability for investors and affect capital costs if transparency falls.