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CVM President highlights importance of the theme for market development and announces entry of the Autarchy into the UN Global Compact
The year 2020 was marked by the COVID-19 pandemic, impacting the economy in the world and revealing, in a very significant way, the importance of discussing the role of ESG criteria (Environmental, Social and Corporate Governance – translated from English), which help to better determine the future financial performance of companies.
Therefore, the 1st day of the series of events The Resumption of the Economy and the Role of the Capital Market was dedicated to discussing the emergence of ESG in the post-pandemic world.
CVM’s President, Marcelo Barbosa, participated in the opening of the meeting, alongside Fábio Coelho, Executive President of the Association of Investors in the Capital Market (AMEC), and Felipe Nogueira, President of the CFA Society Brazil.
According to Marcelo Barbosa, it will be three days of dialogue, with a very deep look at the capital market in Brazil, also reaping some of the international experience. Satisfied that he was holding the event in partnership with AMEC Brasil and the CFA Institute, the President of the CVM pointed out that, over the years, the entities have been working on the development of thematic agendas that are very relevant to the market and, in the present event, more once an essential debate is raised for today: ESG issues.
“The debate that will start today is the emergence of ESG in the post-pandemic world. We need to keep in mind that this is an agenda that, far from showing, is a trend or fad. It is an agenda that permeates all markets at different stages of development and reflects contemporary values that have gained a lot of strength. Investors, whether the most sophisticated or retail, demand transparency regarding this information and make their investment decisions about allocating resources based on the responses that issuers give to these factors. And we at CVM, as a regulator, are working to make this information transparent. ”
Marcelo Barbosa, President of CVM.
In the scope of this performance, Marcelo Barbosa highlighted the launch, yesterday (7/12), of the Public Hearing for revision of CVM Instruction 480. “Our objective is to promote the revision of the terms of the reference form and the improvement of the content of this form, in line with ESG questions, offering greater transparency and breadth about this term. We are sure that the result of this hearing will be very rich, generating a rule with several advances “, he informed.
The CVM President also pointed out that, in 2019, CVM Instruction 480 went through a public hearing, promoting a huge gain to the market. Now, with better knowledge, reflection and with the reduction of the cost of observing the normative radar, the Municipality observed a new need for adjustments: “We have come to the conclusion that there is information that we can receive in another way, not receive or that we do not need for the market itself. Do not give up investor transparency and protection and keep compliance costs at a level that is not beyond what is needed is a challenging and fundamental balance, which is renewed every day. It was a great step forward to bring this topic to the regulatory agenda and to raise awareness, both of the market and of CVM’s technical staff, of the need for reflection on the subject “, concluded.
CVM joins the Brazil Network of the UN Global Compact
In his opening presentation, the President of the CVM also announced the entry of the Municipality into Global Compact Brazil Network. This is an initiative of the United Nations (UN) with a focus on mobilizing the business community to adopt and promote, in their business practices, Ten Principles universally accepted in the areas of human rights, labor, the environment and the fight against corruption. With the creation of the Sustainable Development Goals (SDGs), the Global Compact also has the mission of engaging the private sector in this new agenda.
“It is a pleasure to be able to combine this announcement with the celebration of the 44th anniversary of the CVM, a moment in which we propose to deepen the discussions on socio-environmental issues. Our entry into the Global Compact demonstrates the regulator’s commitment to this agenda and the continuous effort to promote market development on an increasingly solid and transparent basis. ”
Marcelo Barbosa, President of CVM
CVM has been increasingly acting in actions aimed at the sustainability of the capital market. The Autarchy:
- is one of the managing entities and participant of the Financial Innovation Laboratory (LAB), which aims to create innovative financing solutions to leverage private resources for projects with social and / or environmental additionality and contribute to the fulfillment of the Brazilian goals associated with Sustainable Development Goals – SDG (Agenda 2030) and commitments to address the risks of climate change (Paris Agreement). On the LAB website, it is possible to find out all the actions promoted within the scope of the 4 Working Groups: Green Finance; Fintech; Financial Instruments and Impact Investments; and ESG Risk Management and Transparency.
- was part of Sustainable Finance Network (SFN) and now integrates Sustainability Task Force, both from IOSCO, following the evolution of this discussion in the capital market at national and international levels (inherent risks, opportunities and challenges).
- continues to contribute to the induction of better financial practices in sustainability through the regulation of financial instruments, ensuring transparency, consistency and efficiency to the capital market. Some examples are CVM Instruction 588, which deals with crowdfunding (which allows investments with socioenvironmental impacts) and the requirement to disclose material socioenvironmental information about companies in the Reference Form (CVM Instruction 480).
According to Marcelo Barbosa, the CVM is the first Brazilian regulator to be admitted to the Global Compact and it will have tools that will help to increase the Autarchy’s involvement with sustainability issues and discussions in the area. You can also participate in local and international programs. “Actions will be conducted effectively, reinforcing our commitment as a regulator and supporting the 10 universal principles emphasized by the Pact with respect to human rights, work, the environment and anti-corruption”he commented.
There are already more than 16 thousand participants in the initiative, in almost 170 countries, with more than 1,100 members in Brazil (local network that grew the most in 2020).
About the 1st day of the event
Throughout the morning, panels were also held that stimulated the debate on ways to integrate environmental issues in Brazil and corporate governance as an inducer of the capital market:
- Panel 1: Environmental issues are gaining prominence in Europe and the USA, with effects that were also felt in Brazil. Global movements were explored, considering their relationship with risk management, as well as ways to integrate this agenda in the country.
Moderator: Morgan Doyle, Representative of the Inter-American Development Bank (IDB)
Speakers: Virginia Harper Ho, Professor of Law & Earl Shurtz, Julie Ansidei, Autorité des marchés financiers (AMF – France) and Jeroen Bos (CFA, CAIA), Head of Specialized Equity & Responsible Investing
- Panel 2: Principles and best practices of Corporate Governance assist in the assessment of market risks and opportunities. Speakers debated on the recent advances in the theme in Brazil and in the world, in addition to assessing the role of companies and institutional investors in the dissemination of these practices in the market.
Moderator: Cristiana Pereira, Partner at ACE Governance
Speakers: Sarah Bratton Hughes, Head of Sustainability – North Ameri, Mike Lubrano, Senior Advisor of Nestor Advisors at ICGN and Walter Mendes, Vivest
Keep an eye on the 2nd day!
Tomorrow, 9/12, it will be the turn to debate the expansion of the horizons of the capital market. CFTC President and Chief Executive, Heath Tarbert, will be the keynote speaker (special event speaker).
The CVM Investor Protection and Orientation Superintendent, José Alexandre Vasco, will moderate the Looking to the future panel on financial education, which will highlight the relevance of financial knowledge to minimize the effects of the socio-economic crisis caused by COVID-19 and how Brazil and the world have faced the issue.
“With the reduction in interest rates and more favorable economic prospects, the number of individual investors in the capital market increased: it increased fivefold in the last 3 years. It is to be expected that these new entrants are still in the stage of great knowledge, until elementary, on the capital market. Investment in education and financial inclusion is absolutely essential and CVM has a very strong commitment in this regard. In addition to investment planning and choice, knowledge is the first step. investor protection starts with financial education and debating the topic is essential “.
Marcelo Barbosa, President of CVM.
Already CVM’s Director, Flávia Perlingeiro, is one of the speakers at the 100% female panel on diversity in the capital market. The focus will be on the need to encourage gender diversity in publicly traded companies, a movement that started in Europe and is increasingly present in Brazil.
Digital influencers will also be the subject of a panel moderated by Mauro Miranda, Representative of the CFA Institute for Latin America and the Caribbean, which will promote reflection on the role of the regulator and the limit between information and recommendation.
Last day of the event will be dedicated to looking to the future
On that day, the CVM will launch its Regulatory Agenda for 2021. Marcelo Barbosa points out that it has now become a tradition for the CVM to disclose, at the end of the year, the Agenda, in order to level, with the market, the planning of the Autarchy to conclude hearings ongoing public hearings and launch new audiences, allowing the market to study the issues in advance and collaborate with constructive criticisms for normative change. “CVM operates on this normative production front with a public hearing system that is pioneering and one of the most advanced in Brazil. There is no contribution made by market participants that is not analyzed, reflected and commented on in the audience result”, stressed the CVM President.
“On the third day of the event (10/12), we will promote a debate on the future of the capital market, launching some necessary provocations, since the capital market capital always suffers the consequences of the advancement of society, culture and technologies. To keep the capital market attractive and competitive, it is necessary to be in constant evolution, with a watchful eye for these changes. “
Marcelo Barbosa, President of CVM.