ESG and Sustainable Finance Compliance in South America 2026

On May 29, 2026, Brazil's Comissão de Valores Mobiliários published Resolução CVM 244, and with it reversed the single biggest sustainability disclosure mandate in Latin America. Resolução CVM 193, in force since 2023, was set to make ISSB aligned reporting compulsory for publicly held companies starting with fiscal years beginning on or after January 1, 2026. CVM 244 revoked that obligation outright, replacing it with a practice or explain model: from January 1, 2027, a listed company that chooses not to file a sustainability report must publish a market notice explaining why.

The timing could not be sharper. While Brazil was stepping back, Mexico's Comisión Nacional Bancaria y de Valores was preparing to receive the country's first mandatory sustainability reports under Article 82 Bis of the Circular Única de Emisoras, due April 30, 2026, and Chile's Comisión para el Mercado Financiero was finishing its own countdown to a mandatory IFRS S1 and S2 regime that starts with fiscal year 2026. Three of the region's largest securities regulators are moving in three different directions inside the same twelve months.

Add Colombia's new bank level climate risk rule and Argentina's lighter touch disclosure reform, both dated 2025 and 2026, and South America now runs five distinct ESG compliance postures with no shared calendar, no shared assurance standard and, as of this year, no shared direction of travel.

Why did Brazil reverse its mandatory ISSB sustainability reporting rule?

Brazil reversed course because the CVM concluded that forcing every publicly held company into ISSB reporting understated the real cost and readiness gap for smaller issuers. Resolução CVM 193/2023 had made Brazil the first country anywhere to mandate the ISSB's IFRS S1 and IFRS S2 standards, locally adopted as CBPS Pronouncements 01 and 02, for all companhias abertas starting with fiscal years beginning on or after January 1, 2026. Resolução CVM 244, published May 29, 2026, revokes Article 2 of the 2023 rule and the matching clause in Article 5, removing the automatic mandate entirely.

In its place, companies now choose. A company that opts to publish sustainability information must still follow CBPS 01 and 02 in full, and must keep reporting for a minimum of three consecutive fiscal years once it starts, a new lock in period designed to stop issuers from testing the standard for one year and quietly dropping it. A company that opts out has no CBPS obligation at all, but starting with fiscal years from January 1, 2027, it must file a market notice by the date of its annual financial statements explaining the administration's reasoning for not reporting. Brazil remains the first jurisdiction to legislate the ISSB standards into its capital markets rulebook, but it is now the only one in the region moving from mandatory back toward voluntary.

Which South American countries have made IFRS S1 and S2 mandatory for issuers?

Mexico and Chile, and both are converging on the same reporting years. Mexico's CNBV added Article 82 Bis to the Circular Única de Emisoras on January 28, 2025, in force the next day, requiring all CNBV supervised securities issuers, excluding banks, insurers and states or municipalities, to publish a standalone annual sustainability report aligned with IFRS S1 and S2. The first report was due April 30, 2026, covering fiscal year 2025 data, with no external assurance required. Assurance then phases in: limited assurance for the FY2026 report due April 30, 2027, and reasonable assurance for the FY2027 report due April 30, 2028.

Chile's Comisión para el Mercado Financiero issued NCG 519 on November 28, 2024, after a public consultation that ran from August 19 to September 27, 2024. It amends NCG 461 and NCG 30 to require IFRS S1 and S2 reporting inside the Memoria Anual Integrada starting with fiscal year 2026, published in 2027, the same reporting cycle Mexico is already inside. Issuers with average consolidated assets below UF 1 million may file a simplified report instead of the full integrated standard.

Obsidian's per jurisdiction monitoring tracks each of these instruments at the source, so a Mexican subsidiary's April 30 filing deadline and a Chilean parent's 2027 Memoria requirement show up as two separate, dated obligations rather than one blurred regional assumption.

What does Colombia's new SARAS rule require from financial institutions in 2026?

It requires every entity supervised by the Superintendencia Financiera de Colombia to build environmental, social and climate risk into its core risk management system, on a compliance clock that lands mid 2026 and again in early 2027. Circular Externa 015 of 2025, published October 3, 2025, added Chapter XXXIII to the Circular Básica Contable y Financiera, covering the identification, measurement, control and monitoring of environmental and social risks, including climate, inside the Sistema Integral de Administración de Riesgos. A second section sets specific rules for credit operations at banks, financing companies and public development banks such as Bancoldex and Findeter.

Supervised entities had six months from publication, so by roughly April 3, 2026, to submit an implementation plan to the SFC, and eighteen months from publication, or April 3, 2027, to have the full SARAS framework operating. The SFC is also running an early adopter recognition track: entities that want the public "insignia" for early implementation had until December 31, 2026, to apply under Carta Circular 19 of 2026. This sits on top of Colombia's existing issuer level disclosure regime, Circular Externa 031 of 2021, which has required TCFD and SASB aligned ESG chapters in periodic reports since full compliance began in 2024 for Group A issuers.

How does Argentina's comply-or-explain sustainability disclosure differ from ISSB adoption?

Argentina asks issuers to disclose whether they have a sustainability policy at all, not to report against a fixed international standard. The Comisión Nacional de Valores adopted General Resolution 1115/2026, signed February 25, 2026, published in the Boletín Oficial on March 2, 2026 and in force the following day. It reforms Title IV of the CNV Norms to require comply or explain disclosure of the issuer's environmental or sustainability policy and any related KPIs inside the Memoria Anual, alongside a separate apply or explain Corporate Governance Code annex. The first Memoria Anual prepared under the new regime, covering the first full fiscal year after entry into force, is due March 31, 2027.

Crucially, RG 1115/2026 does not require IFRS S1 or S2, or any other named framework: references to GRI, SASB, TCFD or the ISSB are encouraged in CNV guidance but not mandatory. An issuer without a sustainability policy is not penalized for that fact, it must simply have its board explain why such a policy does not fit the business model. That makes Argentina the lightest touch regime in the region for 2026 and 2027, well short of Mexico and Chile's binding ISSB mandates, but still a step beyond having no disclosure requirement at all.

How should a compliance team track five different ESG regimes moving in five directions?

Manually, it means reading the Diário Oficial da União, the Diario Oficial de la Federación, Chile's Diario Oficial, Colombia's own circular archive and Argentina's Boletín Oficial in parallel, and re-checking each one whenever a regulator amends its own prior rule, which is exactly what Brazil just did to itself. That workload is what Obsidian's per jurisdiction monitoring was built for: it watches the CVM, CNBV, CMF, SFC and CNV at the source, flags the specific resolução, circular or resolución that touches an ESG framework already being tracked, and turns five separate national watches into one dashboard with dated alerts.

For teams that want the same sourced answer inside a workflow rather than a browser tab, the same tier-0 data is available through the MCP, so an AI assistant already used for other tasks can confirm, for instance, whether a given Mexican issuer's April 30 report needs assurance yet, without a person first verifying the source is current. Obsidian's AI remains a regulatory companion in that exchange, never a substitute for the compliance officer who ultimately signs the filing, it simply gets the sourced fact into that officer's hands before the deadline rather than after.

What should an ESG compliance team do next

Start by separating "ISSB mandatory" from "ISSB encouraged" on a country by country basis, because that line just moved twice in six months, once in Brazil's direction and once in Mexico and Chile's. A company reporting across the region cannot reuse a single sustainability report template for all five markets: Mexico and Chile need full IFRS S1/S2 content with a phased assurance trail, Colombia needs a TCFD and SASB aligned issuer disclosure plus a separate SARAS risk framework if the entity is SFC supervised, Argentina needs a comply or explain policy statement, and Brazil now needs either a three year CBPS commitment or a documented justification for not reporting.

Obsidian's plans are built for exactly this kind of multi jurisdiction ESG tracking, official source by official source, so the next CVM resolução, CNBV circular or SFC instruction that changes a filing deadline reaches the compliance team before the next earnings call does.