Brazil in the G20 Presidency: Time to Boost Environmental Disclosure | the world we want

In December 2023, Brazil will assume the presidency of the G20 for a period of one year, during which it will be responsible for setting the agenda for action. This international forum brings together the 20 largest economies in the world, and some of its member countries are China, the United States of America, and the United Kingdom, in addition to the European Union. Founded in 1999, it has become one of the main forums for economic cooperation, and after the 2009 crisis, it has expanded its agenda beyond the economic and financial field, presenting topics related to sustainable economic and social development.

The importance of issues of sustainable development, the environment and climate change, and the potential economic and financial repercussions, have made these topics a priority for the G20. The creation of the Sustainable Finance Working Group (SFWG) in 2021 outlines a roadmap for bringing financial flows in line with the goals of the Paris Climate Agreement and the 2030 Agenda. It enables private entities to understand how and how they are affected by environmental risks. Processes and value chains affect the planet. This exercise is being implemented through initiatives to analyze environmental risks and opportunities, such as the Working Group on Climate-Related Financial Disclosures (TCFD), and the consistent disclosure of this information through platforms such as CDP.

Disclosure of environmental information, whether voluntary or mandatory, has gained worldwide traction since the TCFD published its recommendations. Countries such as the United Kingdom, India and the United States already require or will require companies to provide climate-related financial disclosures. In 2021, the Nature Related Financial Disclosure Working Group (TNFD) was established, which builds on the work of TCFD, detailing nature related risks and opportunities. Another related development was the establishment of the International Sustainability Standards Board (ISSB), in the same year, which aims to create a global sustainable standard for business, building on international standards and frameworks already in place.

Global initiatives such as TNFD and ISSB are essential to ensuring comparability and quality of reported data and information. The CDP advocates that High Quality Mandatory Disclosure (HQMD) should be a priority for G20 countries.

Improving sustainability disclosures is a focus of the G20 Sustainable Finance Roadmap. The group wants to increase existing requirements for companies and has already discussed the need to deepen the scope of disclosure to include other environmental factors. Promoting regulations aimed at high-quality ESG disclosure is critical to obtaining data to measure progress against the Global Goals and to assess gaps in ambition and action. Regulations on disclosure of climate and social impacts are an essential mechanism for transparency and will help accelerate the much-needed transformation of capital markets and economies.

In the case of Brazil, there has been significant progress in ESG disclosure regulations. Public companies, financial institutions and insurance companies are now required to disclose more detailed social and environmental information, in line with TCFD recommendations. However, there is still room for progress. G20 governments, including Brazil, are expected to introduce requirements for financial disclosures related to sustainability, as well as disclosure of impacts on people and the planet.

The G20 presidency is a great opportunity for the country to advance the debate on climate data disclosure regime, building on global frameworks and standards for bypassing climate-related financial risks and implementing policies that also include impacts on people and the environment. Brazil should take advantage of this unique context to advance the environmental disclosure agenda, paying particular attention to nature-related aspects, and placing itself at the forefront of this debate.

Raisa Sarri is the Public Policy Coordinator for CDP Latin America.