Brazil was set to require ISSB-aligned reporting from public companies starting next year. However, the country’s Securities and Exchange Commission recently announced that it is walking back these obligations. Brazil will no longer have mandatory ISSB-aligned reporting; instead, companies can choose to report on a voluntary basis. ESG Today reports:
“The changes aim to improve the voluntary adoption model, preserving the transparency and comparability brought about by the need to comply with accounting standards, but restoring the necessary respect for the freedom of entities to estimate the expected costs and benefits of their decisions on how to use investor resources.”
While reporting is now technically voluntary, Brazil will still require companies to do so on a comply-or-explain basis. Companies that choose not to report will still need to justify their decision to abstain. Brazil’s decision to move away from mandatory reporting marks another example of the ongoing pullback from regulators globally. Despite this change, those who choose to report under the Brazilian framework will continue to do so with ISSB-aligned standards.
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