Disclosure of Information on Social and Environmental Matters for Issuers
The Superintendency of Finance, through External Circular 31 of December 22, 2021, issued instructions regarding disclosure of information on social and environmental matters, including climate issues, to be complied with by issuers.
In this sense, it added Annex 2 to Chapter I of Title V of Part III of the Basic Legal Circular, which defines the rules of the information to be disclosed in the periodic year-end report and the quarterly periodic report, which must be transmitted no later than the year 2024.
The main issues to be highlighted in this Circular are as follows:
Application
The environmental and social disclosure instructions apply to issuers, including foreign companies registered in the RNVE (National Registry of Securities and Issuers).
Information to be reported:
- Draft chapter on practices, policies, processes and indicators in relation to social and environmental, including climate, issues.
- In the year-end periodical report, the chapter dedicated to practices, policies, processes and indicators in relation to social and environmental matters, including climate.
- Within the quarterly periodic reports, the chapter dedicated to any material changes in the practices, processes, policies and indicators implemented in relation to social and environmental matters, including climate.
Classification of issuers, detail of information and deadlines
Groups | Emitters | Information to report | Deadline |
A | Issuers that are part of the MSCI Colcap, and those that meet two of the following criteria as of December 31 of the immediately preceding year, belong to this category: a) Have assets in excess of 3.8 million legal monthly minimum wages in force (SMMLV); b) Have annual revenues equal to or greater than 1.9 million legal monthly minimum wages in force (SMMLV); or c) Have a payroll equal to or greater than 1,000 employees. | Brief description of the procedures implemented for the identification of material information in clear, simple and easily understood language for the general public. Additionally, they must disclose the material information identified and the reasons that support its materiality. | Within the periodic report at the end of the fiscal year, the final version of the chapter 15 business days following the date: i) of the general shareholders' meeting or of the body acting in its stead, or ii) of submission to the competent governmental or territorial agency, in the case of national public entities, foreign public entities and/or foreign governments.
The draft of the chapter: Within 15 business days prior to the date of the general shareholders' meeting or the body acting in its stead. |
Information related to climate issues, under the terms of the recommendations of the Task Force for Climate Related Financial Disclosure. | |||
The environmental and social metrics provided for in the SASB Standards of the Value Reporting Foundation.
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(i) A qualitative description of the disclosed metrics, which should include, at a minimum, an analysis of the following elements, in line with the provisions of the VRF SASB Standards, or any superseding standard or framework: (a) The issuer's governance of the impacts, positive and negative, generated by social and environmental issues, addressing the role of the board of directors, its support committees and senior management in the assessment and management of these impacts; (b) The issuer's strategy for managing social and environmental issues in its business and financial planning; and (c) The identification, assessment and management of social and environmental risks.
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Groups | Emitters | Information to report | Deadline |
B | This category includes autonomous assets, collective investment funds, private equity funds and securitization schemes. | Disclose an explanation of the sustainability and responsible investment practices implemented by its manager, administrator, managing agent or their equivalents within the framework of their functions. | It must be submitted no later than 90 calendar days following the date of the issuer's fiscal year end. |
In the event that Group B Issuers decide to incorporate social and environmental issues, including climate issues, into their investment policy, they must disclose how they do so, including their approach, focus or strategy(ies) for the incorporation of these issues and how it responds to the portfolio's objectives and risk management. |
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Group B Issuers that: (i) have a denomination related to any of the social and environmental issues, including climate issues, such as: sustainable, responsible, green or similar, or that aim to generate a positive social or environmental impact, or (ii) use social and environmental issues, including climate issues, in the marketing of the product, must include an explanation of why the strategies used in their investment policy and process contribute to achieving social and environmental objectives, including climate objectives. Additionally, they must indicate if they use a classification system or a taxonomy in the definition of activities and eligible assets in the portfolio of investments or projects. For these purposes, Group B Issuers may use the Colombian Green Taxonomy.
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Groups | Emitters | Information to report | Deadline |
C | Other issuers that do not meet the characteristics of Group A Issuers, Group B Issuers and Group D Issuers belong to this category. | Include a brief description of the procedures implemented for the identification of material information in a clear, simple and easily understandable language for the general public. Additionally, they must disclose the material information identified and the reasons that support its materiality. | Within the periodic report at the end of the fiscal year, the final version of the chapter 15 business days following the date: i) Of the holding of the general shareholders' meeting or the body acting in its stead, or ii) Of submission to the competent state or territorial agency, in the case of national public entities, foreign public entities and/or foreign governments.
The draft chapter: Within 15 business days prior to the date of the general shareholders' meeting or the body acting in its stead. |
D | This category includes: a) issuers under temporary registration and b) issuers of pension bonds. | ||
Quarterly report: All issuers must transmit through the RNVE any material changes in practices, processes, policies and indicators no later than 45 calendar days following the last calendar day of the quarter being reported. The cut-off dates for the information are March 31, June 30, September 30 and December 31 of each year. | |||
Want to know more?
Carlos Andres Molano Camelo Managing Partner Colombia - Bogota
