By: André Jerusalem

On May 26, 2022, the Brazilian Securities and Exchange Commission (CVM) published the study “The ESG agenda and the capital market – An analysis of ongoing initiatives, challenges and opportunities for future reflections by the CVM”. The study deals with the relationship between the environmental, regulatory, social and governance agenda and, obviously, the capital market (with the intention of providing support for future reflections regarding the transparency of ESG information).

This study addressed issues regarding the disclosure of ESG information (or in the Portuguese acronym ASG – environmental, social and governance) by publicly traded companies in developed markets and the relationship of the subject with investors.

This study presents the main international regulations on ESG issues, as well as mandatory or voluntary disclosure standards. The objective is to assess the main trends around the topic and whether there are more appropriate and internationally accepted reporting standards for the disclosure of ESG factors.

It is worth mentioning that some interactions were also carried out with Brazilian publicly-held companies and with real estate securities market regulators in Australia, Canada, the USA and the United Kingdom, who collaborated with data on their regulations, guides, respective overviews and frameworks of transparency used.

The importance of the study comes from the fact that the integration of EGS factors into the capital market has been growing worldwide. The study shows that non-financial risks are increasingly being considered by investors in their decision-making processes.

According to the 2021 IOSCO report, the main drivers related to sustainability are the growing global awareness of the economic and financial impacts of environmental, social and governance (ESG) risks.

The full version of the report can be accessed through this link