Governance Briefing — October 20, 2023
Brazil’s securities regulator issued Resolution 193 on October 20, 2023, creating conduct and disclosure standards for ESG rating providers and strengthening board oversight of sustainability claims in Latin America.
Executive briefing: On 20 October 2023 the Comissão de Valores Mobiliários (CVM) published Resolution 193, Brazil’s first regulatory regime for environmental, social, and governance (ESG) rating providers. The rule imposes registration, governance, and transparency requirements on firms producing ESG opinions for Brazilian issuers and investment products, giving boards clearer accountability for third-party sustainability assessments used in investor communications.
Key obligations
- Authorisation and governance. ESG rating providers must register with CVM, appoint directors responsible for internal controls, and implement policies covering conflicts of interest, methodology management, and complaint handling.
- Methodology transparency. Providers must publish detailed descriptions of models, data sources, and update cycles, enabling issuers and investors to challenge assumptions that drive sustainability scores.
- Data integrity. Firms must maintain records supporting ratings and disclose significant limitations or reliance on issuer-provided information.
Implications for boards
- Brazilian issuers. Audit and sustainability committees should map their reliance on ESG ratings, review provider contracts, and align disclosures with the new transparency duties.
- Latin American investors. Asset managers gain a regulated market for ESG opinions, strengthening stewardship dialogues and reducing greenwashing risk.
- Global companies. Multinationals tapping Brazilian capital markets must ensure global ESG assurance programmes accommodate CVM oversight of rating vendors.
Action checklist
- Inventory ESG ratings used in sustainability reporting, debt issuance, and investor presentations, documenting provider governance and data lineage.
- Update third-party risk assessments to include CVM compliance attestation, audit rights, and methodology transparency clauses.
- Prepare board education materials explaining how Resolution 193 interacts with ISSB standards, EU CSRD, and local stewardship codes.
Sources
Zeph Tech’s Latin America desk helps issuers and investors meet Resolution 193 by auditing ESG data governance and vendor assurance frameworks.