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January 07, 2012
Brazilian Stock Exchange Recommends that Companies Report or Explain
    by Robert Kropp

BM&FBOVESPA, the Brazilian Stock Exchange, adopts report-or-explain position to encourage sustainability reporting by listing companies in advance of the Rio+20 conference in July.

BM&FBOVESPA, the Brazilian Stock Exchange, announced this week that it will now recommend that its listed companies either state that they publish a regular sustainability report and where it can be accessed, or explain why they do not do so.

According to BM&FBOVESPA, the goal of the recommendation is to encourage the adoption of sustainability reporting by companies in advance of the United Nations Conference on Sustainable Development (Rio+20), to be held in Rio de Janeiro.

Rio+20 will mark the 20th anniversary of the first UN Conference on Environment and Development (UNCED), where for the first time countries joined an international treaty to address climate change. The United Nations Framework Convention on Climate Change (UNFCCC) led to the adoption in 1997 of the Kyoto Protocol, which set binding greenhouse gas (GHG) emissions reduction targets for 37 industrialized countries and the European community.

A primary focus of Rio+20 will be the transition to a green economy in the context of sustainable development and poverty eradication.

By adopting a report-or-explain recommendation, BM&FBOVESPA joins a growing number of stock exchanges and nations that either recommend or require sustainability reporting by companies. In 2010, the Johannesburg Stock Exchange (JSE) began requiring its more than 450 companies to produce integrated reports, which combine financial data with reporting on environmental, social, and corporate governance (ESG) issues.

In mid-January, BM&FBOVESPA and the Global Reporting Initiative (GRI) will host workshops to assist companies not familiar with sustainability reporting. GRI's Focal Point Brazil program seeks to drive the mainstreaming of sustainability reporting by companies there.

Brazil was one of the first emerging market countries to develop a sustainability stock index, when in 2005 the Bovespa Corporate Sustainability Index (ISE) was launched.


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