Brazil proposes changes to climate risk disclosure rules

April 15, 2024|Written by |Banco Central do Brasil

The Banco Central do Brasil (BCB) launched a public consultation last month on changes to its climate risk disclosure rules.

The proposed changes are designed to align Brazil’s social, environmental and climate risks and opportunities report (GRSAC) with international climate reporting standards.

“With this public consultation process, the BCB seeks to promote a broad debate with society and regulated institutions. Adopting the public opinion-taking format provides a focused and efficient discussion for establishing quantitative requirements in the GRSAC Report, which will inform BCB’s future regulatory proposals,” Otávio Damaso, the BCB’s deputy governor for regulation, said in a press release.

The proposals include new quantitative requirements around ESG aspects, including standardised templates of metrics and targets, along with annual mandatory disclosures by institutions in Brazil’s national financial system.

It also updates what are considered to be international standards for disclosing sustainable information under the International Sustainability Standards Board, as well as requirements proposed by the Task Force on Climate-related Financial Risks.

The consultation asks for public input on the indicators that could complement climate risk metrics covered by international standards. The central bank is also asking for input on methodologies that should be used to measure financed greenhouse emissions, such as the Partnership for Carbon Account Financials.

The BCB also asks if banks should disclose voluntary climate commitments, such as committing to net-zero emissions, as well as if there would be benefits for a standardised disclosure of transition plans.

The BCB has required banks to account for losses from climate-related risks since 2022. They also must account for transition risks and may incorporate climate change risks into bank stress tests.

The consultation is open until 28 June.

This page was last updated April 15, 2024

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