ESG disclosure in Brazil: State of the market

2017, 31 January

In 2014 and 2015, investor inquiries about corporate governance, company exposure to extreme water stress, corporate health and safety performance and environmental, social and governance (ESG) reporting in Brazil more broadly increased dramatically. With major controversies on multiple fronts – the Petrobras/ Lava Jato corruption scandals, the drought in São Paulo state and the catastrophic collapse of Samarco’s mine tailings dam – investors, both domestic and foreign, started to more actively consider the potential for analysis of this type of information as a window into fundamental company analysis and risk management.

In response, Bloomberg conducted a full review of its ESG data coverage of the Brazilian market, which consists of the main Bovespa Index, and then partnered with SITAWI to analyze the universe and identify themes relevant for investors and other stakeholders in the Brazilian market. Reviewing all the companies in the universe yielded useful insights into the state of ESG reporting in Brazil, especially in relationship to issues with both long-term relevance and near-term urgency. This white paper represents that work and Bloomberg’s commitment to elevating the visibility of sustainable investing and ESG integration into fundamental company analysis.