The Brazilian Accounting Standards for Technical Disclosure of Sustainability Information (NBC TDS 01 and 02) were approved at the 1,112th Plenary Meeting of the Federal Accounting Council (CFC). The historic decision took place on the morning of Thursday (17) and included advisors and vice presidents from all over the country. Brazil became a pioneer with the publication of these standards, contributing to actions aimed at combating global warming and sustainable development.
This achievement is the result of joint work by the Brazilian Committee for Sustainability Pronouncements (CBPS) and the CFC Technical Coordination. The agency’s Technical Vice President, Ana Tércia Lopes Rodrigues, highlighted the purpose of these regulations. “The main objective is for companies to be able to identify material items within the volume of accounting information they manage and report to the market how these climate and sustainability issues impact the business and investors’ decision-making,” she explained.
NBC TDS 01 aims to establish general requirements regarding disclosures of information on risks and opportunities related to sustainability. The proposal is that this data be useful for users of general purpose financial reports in making decisions about the provision of resources to the entity. The text is aligned with document IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, issued in June 2023 by the International Sustainability Standards Board (ISSB).
The document also determines how entities should prepare and report their financial disclosures related to sustainability. The text also presents general requirements for the content and presentation of these disclosures. The proposal is that these data be useful to users in making decisions regarding the provision of resources to the entity.
NBC TDS 02 is aligned with document IFRS S2 – Climate-related Disclosures, issued in June 2023, by the ISSB. The text contains guidance from the Task Force on Climate-related Financial Disclosures (TCFD) and encompasses sector-based disclosure requirements derived from the Sustainability Accounting Standards Board (SASB).
This standard determines the disclosure of information on climate-related risks and opportunities. The objective is for this data to be useful to users, with regard to general purpose financial reports in making decisions regarding the provision of resources to the organization and that contemplate the following elements: physical risks; transition risks; opportunities available to the organization.
Based on this regulation, users of general purpose financial reports will be able to understand, specifically, the following factors concerning climate-related risks and opportunities:
• the governance processes, controls and procedures that the organization uses to monitor, manage and supervise them;
• the entity's strategy for its management;
• the processes the entity uses to identify, assess, prioritize and monitor them, including whether and how these processes are integrated into and inform the entity's overall risk management process; and
• the entity's performance, including progress towards any climate targets set and required to be met by law or regulation.
The accountant also celebrated the country's position in these discussions. "I would like to highlight the pioneering role of our Federal Council, which has been mentioned in all the environments we have been in during this adoption process. The Federal Council has been mentioned very positively, especially at international events. During our participation in the Ipass Meeting [International Accounting Standards Setters Forum] and the WSS [World Standard-setters Conference] of IFRS Foundation, for example, in all the presentations on sustainability, Brazil appeared as the country that is, in a pioneering way, assuming the adoption of this information”, he shared.
Rodrigues also mentioned the participation of society in this process. This is because the standards were subject to public hearing and received 33 contributions from 28 submitters. The vice-president emphasized that this stage resulted in a robust report. “In this public hearing document, there were so many contributions, on so many different subjects, that it was organized by subject,” she pointed out. The material is divided into a general analysis of the comments received; suggestions for changes or inclusions of definitions and terms; requests for concessions for implementing the standards; educational challenges; notes on the place of disclosure of financial information related to sustainability; timing of disclosure of financial information related to sustainability; among other topics.
Former CFC president and representative of the entity at CBPS, Zulmir Breda, worked hard on the process of publishing these standards. The accountant spoke about the importance of approving the documents. “Indeed, I think we have a lot to be proud of at this moment. The Federal Accounting Council took an important step in adopting these sustainability disclosure standards. That Plenary meeting in Bento Gonçalves, in October of last year, when we approved Resolution No. 1,710, was extremely important,” he said. Breda also acknowledged the work of the Independent Auditing Institute (Ibracon), the entity responsible for translating IFRS S1 and S2 standards. Based on these documents, NBC TDS 01 and 02 were constructed.
The president of the CFC, Aécio Dantas, celebrated the moment experienced by the entity and highlighted the next phases that follow the approval of the standards, which involve the broad dissemination and adoption of the content by accounting professionals. “This is just one extremely important step that we have taken, a historic step, but many actions are yet to come. We have worked tirelessly to disseminate these sustainability standards and to internalize in the class this feeling that [sustainability] is a subject that belongs to us”, he reinforced.
Source: Federal Accounting Council
