Last Wednesday, October 10, Mattos Filho law firm organized the event “CVM Resolution No. 59 and its impacts on publicly-held companies, especially on ESG practices”.
Full team present: Juliana Ramalho (ESG), Henrique Ferreira Antunes, Adriana Mattos, Vanessa Fiusa (Capital Markets), Francisco A. Coutinho (Executive Compensation) and Renato Portella (Compliance).
We share some of our notes below.
General
* “Comply or explain” model, which, despite not being mandatory, the company's positioning is judged by the market. Companies “must communicate more”. Very significant change.
* Segregation of risks into social and environmental, subdivided into climatic and transition. Linked to the main risk matrix.
* 5 main risks should be highlighted.
* ESG: indicate main applicable regulations.
* SDGs: linked to the risk matrix, consistency between the “formulário de referência” (FR) and sustainability report. And audit. Adherence to the methodological standard (only) is audited but not the contents and. e.g., the achievement of goals. An expansion of the scope of audits is expected.
* Publicize diversity issues in the Board (gender and race) and in the company (gender, race and age).
Capital market
* Improved FR structure, no repetitions of information published elsewhere
* Time lapse from 3 years to drops to just 1 fiscal year
* Relevant lawsuits: a) companies need to indicate why they are relevant and b) include summary of decisions
Disclosure ESG in FR
* CVM: Report, methodology, materiality and metrics
* CVM's initial emphasis: a) in “E”: climate issues and b) in “S”: diversity
* Materiality is important, and varies across industries
* TCFD, asks whether is adopted or not. And if a carbon inventory is done
* "ESG opportunities" also be indicated, including in the company's "core". (This is great !)
Executive Compensation and Compliance
* Company must indicate whether compensation is linked to ESG factors
* Indicate the amount of “confirmed” fraud and illicit acts against the public administration (concept is neither “judicial nor administrative”). And mitigating actions.
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