Brazil is reconsidering whether sustainability and climate-related reporting should become mandatory for publicly traded companies, just five months after eliminating its original reporting requirement. The latest development introduces renewed uncertainty for companies operating in Brazil and raises the possibility that mandatory disclosures could return under a revised framework.

On October 29, 2026, Brazil's Securities and Exchange Commission (Comissão de Valores Mobiliários, or CVM) launched a public evidence-gathering consultation to evaluate the costs and benefits of mandatory sustainability reporting. The consultation will inform potential future regulatory changes, including phased implementation, climate-only reporting requirements, and differentiated obligations based on company size.

Brazil's Sustainability Reporting Framework Faces Another Turning Point

Brazil initially established its sustainability reporting framework in October 2023 through CVM Resolution No. 193. The regulation introduced sustainability and climate-related financial disclosures aligned with standards developed by the International Sustainability Standards Board (ISSB).

Under the original framework, publicly traded companies would have been required to report for financial years beginning on or after January 1, 2026.

However, on May 29, 2026, CVM issued Resolution No. 244, removing the general mandatory reporting requirement and replacing it with a voluntary framework.

The revised framework introduced several conditions:

• Publicly traded companies may choose whether to publish sustainability reports under the framework.

• Companies electing to report must follow the applicable Brazilian Sustainability Pronouncements Committee (CBPS) and ISSB standards.

• Companies choosing to report must maintain reporting for at least three consecutive financial years.

• Beginning January 1, 2027, publicly traded companies that choose not to file a sustainability report must explain their decision through a formal market announcement, subject to the prescribed filing deadline.

These requirements remain in effect while CVM evaluates potential changes.

Regulators Are Evaluating a Return to Mandatory Disclosure

The latest consultation, published as Public Call for Evidence ASA/CVM No. 02/2026, signals that Brazil's current voluntary approach may not be permanent.

CVM is examining whether voluntary disclosures provide investors with sufficiently reliable, comparable, and decision-useful sustainability information.

The regulator is also considering whether mandatory reporting could deliver financial benefits, including lower costs of capital, that outweigh the additional compliance burden imposed on companies. Importantly, CVM has not proposed a final replacement regulation. Instead, it is gathering evidence to evaluate several potential approaches, including:

• Phased mandatory reporting: Introducing disclosure requirements gradually, potentially beginning with larger publicly traded companies.

• Climate-focused requirements: Making climate disclosures mandatory while allowing greater flexibility for other sustainability information or Scope 3 greenhouse gas emissions.

• Size-based thresholds: Establishing reporting obligations based on company characteristics to reduce disproportionate burdens on smaller businesses.

• Continued voluntary reporting: Maintaining the existing framework, potentially with modifications to encourage greater participation.

The consultation also examines whether the existing voluntary reporting conditions, including assurance requirements and minimum reporting periods, may discourage companies from participating.

What This Means for Companies Operating in Brazil

For multinational businesses, Brazil's latest announcement reinforces the importance of monitoring sustainability reporting requirements even when mandatory obligations have been withdrawn.

Companies with publicly traded Brazilian entities should reassess their potential exposure to future ISSB-aligned reporting requirements, particularly if CVM introduces differentiated obligations based on company size or reporting maturity.

The potential reintroduction of mandatory climate reporting could require companies to strengthen internal processes for collecting greenhouse gas emissions data, assessing climate-related risks and opportunities, and preparing financially material sustainability disclosures.

However, having operations or subsidiaries in Brazil does not, by itself, establish an obligation to report under CVM Resolution No. 193. Applicability depends on the regulated entity and the relevant reporting framework. Any expansion beyond currently covered entities would require further regulatory action.

Companies already preparing disclosures under International Financial Reporting Standards (IFRS) S1 and S2 may be better positioned to respond to a future Brazilian reporting mandate, although local requirements would still need to be assessed.

Key Dates and Regulatory Milestones

What Happens Next?

The public consultation remains open until February 28, 2027, allowing companies, investors, industry associations, and other stakeholders to submit evidence and recommendations.

Following the consultation, CVM may initiate a formal Regulatory Impact Assessment (RIA) to evaluate potential amendments. Whether that assessment proceeds, and its scope, will be determined through the regulator's 2027 planning process.

For sustainability and compliance teams, the immediate priority should be to monitor the consultation, review the applicability of existing voluntary reporting requirements, and preserve the reporting capabilities already developed in anticipation of the original 2026 mandate.

The key takeaway: Brazil has not reinstated mandatory sustainability reporting. However, its decision to formally reconsider the voluntary framework means companies should not assume that the May 2026 rollback represents a permanent reduction in reporting obligations.