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  3. The Central Bank of Brazil (BCB) expanded the rules on risk management and transparency related to social, environmental, and climate issues, applicable to financial institutions subject to prudential regulation. Comprising five new normative acts, the expansion is designed to improve the stability and reliability of the National Financial System.

The Central Bank of Brazil (BCB) expanded the rules on risk management and transparency related to social, environmental, and climate issues, applicable to financial institutions subject to prudential regulation. Comprising five new normative acts, the expansion is designed to improve the stability and reliability of the National Financial System.


The Central Bank of Brazil (BCB) expanded the rules on the management of risks and transparency associated with social, environmental, and climate change issues, applicable to financial institutions operating in the National Financial System (SFN, in the Portuguese acronym), and subject to prudential regulation (CMN Resolution n.º 4.553/2017). According to BCB, the expansion seeks to improve the stability and reliability of the SFN, in line with the latest international recommendations. It stems from Public Consultations n.º 85/2021 and 86/2021, reported in the 23rd edition of the Regulatory Report.

Firstly, the expansion concerns the replacement of the definition of “socio-environmental” risks with three separate definitions for social, environmental, and climate change risks, and the update of risk management provisions and transparency instruments related to those definitions. It applies to financial institutions subject to the aforementioned prudential regulation classified from “S1” to “S5”. More specifically, it covers:

  • CMN Resolution n.º 4.943/2021, which amended CMN Resolution n.º 4.557/2017 (Risk management and disclosure of information). It included a risk management framework (articles 38-D to 38-F) to be observed by financial institutions classified from “S1” to “S4”. The resolution comes into force on July 1st, 2022, while specific provisions come into force on December 1st, 2022. More details are available on BCB’s website; and
  • CMN Resolution n.º 4.944/2021, which amended CMN Resolution n.º 4.606/2017’s article 20 (Simplified risk management), applicable to “S5” financial institution (segment of lowest complexity and least risk exposure). The resolution comes into force on December 1st, 2022.

Secondly, the expansion enacted the Social, Environmental, and Climate Responsibility Policy (PRSAC, in the Portuguese acronym), which must be developed and made publicly available by all aforementioned financial institutions (classified from “S1” to “S5”). More specifically:

  • CMN Resolution n.º 4.945/2021, designed to replace CMN Resolution n.º 4.327/2014. It determined that every institution must appoint a focal point for the PRSAC (article 5) and that a committee on social, environmental, and climate-related responsibility must be constituted in “S1” and “S2” institutions (article 6). The resolution comes into force on July 1st, 2022, while some provisions (including those for “S3” to “S5” institutions) come into force on December 1st, 2022. More details are available on BCB’s website.

Thirdly, the expansion established the Report on Social, Environmental, and Climate-related Risks and Opportunities (GRSAC Report, in the Portuguese acronym), which must be elaborated annually and made publicly available by the aforementioned financial institutions classified from “S1” to “S4”. More specifically:

  • BCB Resolution n.º 139/2021, which established the GRSAC Report, providing specific provisions for “S1” and “S2” financial institutions. The resolution comes into force on December 1st, 2022. More details are available on BCB’s website; and
  • Normative Instruction n.º 153/2021, which clarified specific groups of information to be published in the GRSAC Report. It comes into force on December 1st, 2022.