Management Consulting

Case Study: Brazil is the First Country to Adopt ISSB Brazil has taken a pioneering step by becoming the first country in the world to adopt the International Sustainability Standards Board (ISSB) as its mandatory disclosure framework, set to begin in 2026. This strategic move aims to facilitate the efficient allocation of capital across global markets, particularly in the context of the energy transition and sustainable development. The primary challenge Brazil faces is the need to attract international capital to bolster its local industries, especially in the natural resources sector, which includes low carbon technology and renewable energy. By adopting the ISSB framework, Brazil seeks to create a more transparent and comparable sustainability reporting environment, which is crucial for drawing in foreign investments. Daniel Ocampo, Aon’s Global Senior Risk Consultant for Natural Resources, emphasizes that this strategy could enhance the connection between the public and private sectors, enabling a diversified energy mix that includes fossil fuels, conventional power generation, and renewable energy sources. The expected outcomes of this initiative are significant. By becoming an early adopter of the ISSB, Brazil aims to improve the financial sustainability of its entities and facilitate infrastructure development. The adoption is anticipated to influence fund allocation from 2026 to 2030, potentially leading to increased capital flow into the country. As of March 5, 2024, Singapore has followed suit, becoming the second nation to implement the ISSB as a mandatory disclosure framework. This trend suggests a growing global movement towards standardized sustainability reporting, which could enhance capital flow and investment opportunities across various sectors. In summary, Brazil's adoption of the ISSB framework represents a critical step in its efforts to navigate the complexities of the energy transition, attract international investment, and promote sustainable development within its economy. The strategic alignment with global sustainability standards is expected to yield substantial benefits, including improved access to capital and enhanced transparency in sustainability practices.