To specialist, quality information available to investors is one of the pillars of a developed capital market
ESG is presently a trending topic – but the acronym Environmental, Social and Corporate Governance first emerged in 2005, at the United Nations, as a way to integrate social, environmental and governance factors into capital markets. Moreover, in order to meet ESG standards, the International Financial Reporting Standards (IFRS) and the Global Reporting Initiative (GRI) joined forces to create a new set of standards while bringing together their advisory bodies referring to sustainability reporting.
Following adoption of IFRS in Brazil in 2007, companies have gained greater accounting transparency, better business management, financial reporting that is more uniform and efficient – and now use internationally accepted standards. The GRI, on the other hand, helped companies identify the impacts of their operations on the environment, on economy and on civil society, as well as report good conduct and sustainability standards.
Added to the administrative and management benefits they brought to companies, these reports also resulted in international visibility and added value to their actions.
According to lawyer Ricardo dos Santos de Almeida Vieira – specialized in M&A transactions and partner at Barcellos Tucunduva Advogados –, one of the pillars of a developed capital market is the quality information available to investors. “This is a challenge when we talk about criteria and about elements that have not yet been consolidated or standardized, such as measuring ESG standards,” he says.
To him, “alignment between the GRI and IFRS can be an important milestone for standardization, because it creates comparable information and presents those who actually adopt consistent ESG practices to investors,” Vieira concludes.
Source: Ricardo dos Santos de Almeida Vieira is a lawyer; a specialist in M&A operations (“buy side” and “sell side”) and in the planning and execution of corporate structures; a specialist (LL﹒M) in Financial and Capital Market Law and Corporate Law (INSPER); a specialist in Tax Law (Mackenzie); and partner at Barcellos Tucunduva Advogados.
Source: Empreende Magazine
