Agenda BC#: Public consultation will enhance the regulation of disclosure related to the social, environmental and climate risks of financial institutions
The Central Bank of Brazil has launched a public consultation in the form of an assessment of viewpoints on improvements to the regulation that establishes the disclosure of the Report on Social, Environmental and Climate Risks and Opportunities (GRSAC Report). Through questions on selected topics deemed relevant to updating the GRSAC Report, the public consultation seeks a targeted and efficient way to include quantitative requirements.Established within the scope of the “Sustainability” dimension of the Agenda BC#, the GRSAC Report aims at promoting market discipline through transparency, making it possible for depositors, investors and the general public to know and compare the level of exposure of financial institutions to social, environmental and climate risks, as well as the prudential treatment given to them, in addition to the opportunities perceived in relation to these topics.The GRSAC Report will remain aligned with the recommendations of the Task Force on Climate related Financial Disclosures (TCFD), which were largely incorporated into the standards developed by the International Sustainability Standards Board (ISSB), the new board of the IFRS Foundation and incorporated in the recently concluded public consultation of Basel Committee for Banking Supervision (BCBS). The TCFD was disbanded in October 2023.The Central Bank of Brazil has been implementing transparency requirements in phases. The first phase, in 2021, brought standards on the mandatory disclosure of qualitative information on strategies, governance, and management structures for social, environmental and climate risks.The second phase, which includes the current public consultation, aims at discussing in more depth and detail definitions and formats for disclosing quantitative information, such as exposures by sector, targets and respective indicators.The full alignment of the GRSAC Report with international standards, specifically the new requirements agreed upon by the BCBS and aimed at the banking sector, will be completed in the third phase, to be integrated to the agenda BC#.Phase 3, scheduled to be completed in 2025, will consist of issuing a new public consultation on a regulatory proposal in the second half of 2024, including a comprehensive review of the qualitative information requirements currently in force, in addition to the incorporation of quantitative requirements, subject of the present public consultation.The GRSAC Report is composed of standardized tables and templates published annually and is mandatory for institutions in the National Financial System (SFN) under proportionality criteria based on the size and complexity of the institutions, according to the segmentation established in 2017.The present public consultation is available at the Central Bank of Brazil website. Comments should be submitted by June 28th.Click here to access the full text.
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The Central Bank of Brazil has launched a public consultation in the form of an assessment of viewpoints on improvements to the regulation that establishes the disclosure of the Report on Social, Environmental and Climate Risks and Opportunities (GRSAC Report). Through questions on selected topics deemed relevant to updating the GRSAC Report, the public consultation seeks a targeted and efficient way to include quantitative requirements.
Established within the scope of the “Sustainability” dimension of the Agenda BC#, the GRSAC Report aims at promoting market discipline through transparency, making it possible for depositors, investors and the general public to know and compare the level of exposure of financial institutions to social, environmental and climate risks, as well as the prudential treatment given to them, in addition to the opportunities perceived in relation to these topics.
The GRSAC Report will remain aligned with the recommendations of the Task Force on Climate related Financial Disclosures (TCFD), which were largely incorporated into the standards developed by the International Sustainability Standards Board (ISSB), the new board of the IFRS Foundation and incorporated in the recently concluded public consultation of Basel Committee for Banking Supervision (BCBS). The TCFD was disbanded in October 2023.
The Central Bank of Brazil has been implementing transparency requirements in phases. The first phase, in 2021, brought standards on the mandatory disclosure of qualitative information on strategies, governance, and management structures for social, environmental and climate risks.
The second phase, which includes the current public consultation, aims at discussing in more depth and detail definitions and formats for disclosing quantitative information, such as exposures by sector, targets and respective indicators.
The full alignment of the GRSAC Report with international standards, specifically the new requirements agreed upon by the BCBS and aimed at the banking sector, will be completed in the third phase, to be integrated to the agenda BC#.
Phase 3, scheduled to be completed in 2025, will consist of issuing a new public consultation on a regulatory proposal in the second half of 2024, including a comprehensive review of the qualitative information requirements currently in force, in addition to the incorporation of quantitative requirements, subject of the present public consultation.
The GRSAC Report is composed of standardized tables and templates published annually and is mandatory for institutions in the National Financial System (SFN) under proportionality criteria based on the size and complexity of the institutions, according to the segmentation established in 2017.
The present public consultation is available at the Central Bank of Brazil website. Comments should be submitted by June 28th.
Click here to access the full text.
Click here to access the full text.
