On December 22nd, 2021, the Brazilian Securities and Exchange Commission (CVM), after a process which led to a public hearing initiated in December 2020, altered its Instructions No. 480 and No. 481 through the publication of Resolution No. 59, which, through adjustment of the reference form, intends to simplify the system for disclosure of information by publicly held companies and foster innovations of report guidelines on social, environmental and corporate governance aspects regarding their activities within the ESG field.

The reference form is considered one of the main mandatory documents of publicly held companies, intended to inform investors about fundamental data of the invested companies. The form, which is disclosed on an yearly basis, was simplified to: (i) reduce the scope information from three to one fiscal year; (ii) focus on the five main risk factors over the others; and (iii) restrict officers’ comments only to significant modifications of financial and cash flow statements, instead of each and any item of the financial statements.

Regarding ESG practices, the new text, which predominantly has a guidance characteristic, adopts the “declare or explain” so-called model, and aims at encouraging companies to develop the highlighted aspects in order to avoid possible reputational damage from exposing their omission to investors. The following innovations should be emphasized:

The resolution comes into effect in January 2023.

For futher informations, please contact:
Alessandra Höhne

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