Brazilian Federal Government Creates Inter-institutional Committee to Develop Brazilian Sustainable Taxonomy
On March 25, 2024, the Brazilian federal government published Decree No. 11.961/2024, establishing an advisory and deliberative group, the Brazilian Sustainable Taxonomy Interinstitutional Committee (“CITSB”), which will coordinate the development and implementation of the Brazilian Sustainable Taxonomy (“TSB”). The TSB will establish a classification system for sustainable projects and activities, providing standardized terminology for companies, financial institutions, investors, regulatory bodies, governments, and other stakeholders, thereby harmonizing investment decisions and the development of public policies.
The CITSB will consist of 27 governmental agencies and serve as the highest decision-making body in the governance of TSB, and will include the following objectives: (i) drafting and approving its internal regulations; (ii) approving plans and initiatives in connection with the TSB; and (iii) overseeing the implementation of the TSB and assessing its results.
The Decree was published after the Ministry of Finance concluded a public consultation requesting contributions to the Sustainable Taxonomy Action Plan, which seeks to propel the development of a Brazilian taxonomy addressing primary environmental and social challenges. (See our Legal Update discussing the public consultation on Brazil’s Sustainable Taxonomy Action Plan).
Furthermore, there are bills currently being discussed at the National Congress—Bill No. 2838/2022 in the Chamber of Deputies and Bill No. 5209/2023 in the Senate—that seek to establish standards and guidelines for the development of a national sustainable taxonomy.
The creation of the CITSB—and the monitoring of its work and results—should be relevant to the business sector, especially in the context of guidelines and directives that guide investments and policies in Brazil, focusing on issues involving sustainability, opportunities for innovation, mitigation of risks, and improvement of transparency practices.
The Environmental, Climate Change and ESG Practice of Tauil & Chequer Advogados, in association with Mayer Brown, is available for further consultation.
