Brazil will incorporate ISSB sustainability disclosure standards into its regulatory framework, according to an Oct. 20 announcement by the International Financial Reporting Standards Foundation.
The organization's International Sustainability Standards Board unveiled two global sustainability disclosure standards on June 26 that let investors see how companies manage climate risks and opportunities and other sustainability issues, with information tied to corporate financial statements.
S1 covers sustainability-related risks and opportunities faced over the short, medium and long term, while IFRS S2 covers specific climate-related disclosures.
The Brazilian Ministry of Finance and the Comissão de Valores Mobiliários said in the announcement that the ISSB standards will be voluntary beginning in 2024 but will shift to mandatory use on Jan. 1, 2026, as part of mandatory IFRS accounting standards.
Latin American jurisdictions including Chile and Columbia have been at the forefront of mandating sustainability-related financial disclosures, according to IFRS.
"We continue to hear strong support for the ISSB's standards from regulators globally," said ISSB Chair Emmanuel Faber in the announcement.
The International Organization of Securities Commissions — whose members regulate more than 95% of world securities markets — have called on its 130 member jurisdictions to consider incorporating the ISSB standards into their respective regulatory frameworks. In September, the IFRS Foundation published the Spanish translation of IFRS S1, with one for IFRS S2 expected shortly, as well as Portuguese versions.