The CVM in Brazil updated its disclosure requirement in 2021 to mandate a comply or explain disclosure of climate and ESG-related risks. In Mexico, the CONSAR now requires that pension funds incorporate ESG criteria into their investment strategy.

February 28, 2022

2022 Latin America Proxy Season Preview

Below are key takeaways from ISS’ recently released Latin America 2022 Proxy Season Preview. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.

  • Super Voting Shares are now authorized in Brazil, after the approval of Congress and President Jair Bolsonaro’s signing of the New Business Environment Law (Law 14.195/2021), which brought changes to the country’s Corporate Law. The new law is pending regulation by the Brazilian Securities Regulator (CVM).
  • ESG Disclosure is expected to continue to improve in the Latin America region. In 2021, the Brazilian Securities Regulator (CVM) updated its disclosure requirement to mandate a comply or explain disclosure of climate and ES&G-related risks by publicly traded companies. In Mexico, the National Commission of the Retirement Savings System (CONSAR) now requires that Mexican pension funds (AFOREs), the largest domestic institutional investors, to incorporate ES&G criteria into their investment strategy.
  • Political Uncertainty and Market Volatility are expected in 2022, when Brazil and Colombia will hold presidential elections. Chile is expected to disclose a new constitution to be drafted by 155 newly elected constituints to be issued under the country’s recently elected president, a former student leader, and the youngest president in Chile’s history. Both Mexico and Argentina held mid-term elections in 2021, with opposition forces changing the layout of the countries’ political environment.
  • Policy Changes for the Latin America region in 2022 include the introduction of a framework  for the analysis of climate-related proposals, the refinenment of the independence classification of director nominees, the end of the grace period for the gender diversity policy, and other changes to the election of minority shareholder nominees to the board and fiscal council, in the absence of timely disclosure. 

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By Rica David, Renata Schmitt, Diana de Leon

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