/ CMF Evaluates the Gradual Establishment of ESG Compliance in Annual Reports

20 October, 2021

After a public consultation, the Financial Market Commission (CMF) evaluates establishing graduality to comply with ESG regulations in annual reports. Our associate expert in green finance, Gabriel Arancibia, was interviewed by Diario Financiero (DF) on this issue.


As detailed by DF, in March 2021, the CMF put in public consultation the regulation that updates and perfects the environmental, social and governance (ESG) criteria that issuers of publicly offered securities registered in the Securities Registry must include in their annual reports.

The ESG criteria, for financial decision-making, cover the following aspects:

  • Environmental (E): how business activities affect the environment.
  • Social (S): the impact of the company’s activities on the community (diversity, human rights, health care, etc.).
  • Governance (G): impact of shareholders and management. It is based on transparency, board structure, shareholder rights, etc.

The public consultation ended in April and the CMF commented that 51 comments were received from various entities and individuals. In addition, they have organized worktables with 135 participants, among them lawyers, investors, trade associations, issuers, academics, NGOs, etc.

The CMF detailed to DF that they received comments on the necessary gradualness for issuers that are not up to date in ESG information. It is expected that during the last three months of 2021 the final regulatory document will be published. The CMF notes that the comments received will be incorporated into the text to improve the information and facilitate its understanding, strengthen comparability between what is reported by different entities and establish a timetable announcing the entry into force of the regulation.

Our associate lawyer and expert in green finance, Gabriel Arancibia, commented to DF that the draft regulation proposes a restructuring of the Annual Report, as it aims to incorporate ESG criteria in a more comprehensive manner. He also added that the new regulation makes companies more attractive to investors, both domestic and international.

“It should translate into better corporate governance, an improvement in ESG risk management, which is expected to increase their resilience, for example, in the face of climate change scenarios, and an improvement in their understanding of the effects that companies produce both internally and in their environment, among others,” Arancibia told DF.

The lawyer added that this is good news for investors as they will be able to make better decisions by having access to public information on how the ESG criteria of Chilean securities issuers operate.

In the interview, the associate attorney of Alessandri also highlighted that this regulation will have effects for the financial system as a whole, as it would improve the standards of transparency, sustainability and corporate governance of companies. “It is already clear that, for example, climate change has the potential for systemic risk for the financial market, so it is imperative that financial market players incorporate it into their analysis and business models,” Arancibia told the media.